Required information [The following information applies to the questions displayed below.] Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (seller) products. May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $11 cash per unit (for a total cost of $22,000). May 5 Allied sold 1,000 of the units in inventory for $15 per unit (invoice total: $15,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $11,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,500). Allied. restores the units, which cost $1,100, to its inventory. May 8 Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price reduction (allowance) and credits Macy's accounts receivable for $700 to compensate for the damage. May 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. View transaction list Journal entry worksheet 1 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $11 cash per unit (for a total cost of $22,000).
Required information [The following information applies to the questions displayed below.] Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (seller) products. May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $11 cash per unit (for a total cost of $22,000). May 5 Allied sold 1,000 of the units in inventory for $15 per unit (invoice total: $15,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $11,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,500). Allied. restores the units, which cost $1,100, to its inventory. May 8 Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price reduction (allowance) and credits Macy's accounts receivable for $700 to compensate for the damage. May 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. View transaction list Journal entry worksheet 1 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $11 cash per unit (for a total cost of $22,000).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (seller) products.
May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a
price of $11 cash per unit (for a total cost of $22,000).
May 5
Allied sold 1,000 of the units in inventory for $15 per unit (invoice total: $15,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $11,000.
May 7
Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,500). Allied
restores the units, which cost $1,100, to its inventory.
May 8
Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied
gives a price reduction (allowance) and credits Macy's accounts receivable for $700 to compensate for
the damage.
May 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of
returns, allowances, and any cash discount.
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross
method.
View transaction list
Journal entry worksheet
1
Allied made its first and only purchase of inventory for the period on May 3 for
2,000 units at a price of $11 cash per unit (for a total cost of $22,000).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5611c6de-96f4-4720-97c2-15756f5bd45b%2Fb4f7606a-7649-4934-98bf-7c3d43445309%2Foniyjgo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (seller) products.
May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a
price of $11 cash per unit (for a total cost of $22,000).
May 5
Allied sold 1,000 of the units in inventory for $15 per unit (invoice total: $15,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $11,000.
May 7
Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,500). Allied
restores the units, which cost $1,100, to its inventory.
May 8
Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied
gives a price reduction (allowance) and credits Macy's accounts receivable for $700 to compensate for
the damage.
May 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of
returns, allowances, and any cash discount.
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross
method.
View transaction list
Journal entry worksheet
1
Allied made its first and only purchase of inventory for the period on May 3 for
2,000 units at a price of $11 cash per unit (for a total cost of $22,000).
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