What is incorrect here? Available options are:Accounts Payable, Accounts Receivable, Accumulated Depreciation, Bond Premium, Bonds Payable, Building, Cash, Common Stock, Cost of Goods Sold, Delivery Expense, Depreciation Expense, Discount on Bonds Payable, Dividends Declared, Finance Costs, Goodwill, Intrest Expense, Intrest Income, Intrest Payable, Intrest Receivable, Land, Merchandise Inventory, Micellanious Expense, Other Expenses, Sales, Sales Discounts, Sales Returns and Allowances, Finance Costs, Goodwill Required informationUse the following information for the Exercises 6-8 below. (Algo)[The following information applies to the questions displayed below.]Allied Merchandisers was organized on May 1. Macy Co. 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 1,000 units at aprice of $10 cash per unit (for a total cost of $10,000).5 Allied sold 500 of the units in inventory for $14 per unit (invoice total: $7,000) to Macy Co. undercredit terms 2/10, n/60. The goods cost Allied $5,000.7 Macy returns 50 units because they did not fit the customer's needs (invoice amount: $700). Alliedrestores the units, which cost $500, to its inventory.8 Macy discovers that 50 units are scuffed but are still of use and, therefore, keeps the units. Alliedgives a price reduction (allowance) and credits Macy's accounts receivable for $300 to compensate forthe damage.15 Allied receives payment from Macy for the amount owed on the May 5 purchase;returns, allowances, and any cash discount.payment is net of X Answer is not complete.NoDateGeneral JournalDebitCredit1May 03Merchandise inventory10,000Cash10,0002May 05Accounts receivable7,000Sales7,0003May 05Merchandise inventory500 XCost of goods sold500 X4May 07Sales returns and allowances700Accounts receivable700May 07Merchandise inventory500Cost of goods sold500May 08Accumulated depreciationX,300Accounts receivable3007May 15Cash6,000 XAccounts receivable6,000 X

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

What is incorrect here?

Available options are:

Accounts Payable, Accounts Receivable, Accumulated Depreciation, Bond Premium, Bonds Payable, Building, Cash, Common Stock, Cost of Goods Sold, Delivery Expense, Depreciation Expense, Discount on Bonds Payable, Dividends Declared, Finance Costs, Goodwill, Intrest Expense, Intrest Income, Intrest Payable, Intrest Receivable, Land, Merchandise Inventory, Micellanious Expense, Other Expenses, Sales, Sales Discounts, Sales Returns and Allowances, Finance Costs, Goodwill

Required information
Use the following information for the Exercises 6-8 below. (Algo)
[The following information applies to the questions displayed below.]
Allied Merchandisers was organized on May 1. Macy Co. 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 1,000 units at a
price of $10 cash per unit (for a total cost of $10,000).
5 Allied sold 500 of the units in inventory for $14 per unit (invoice total: $7,000) to Macy Co. under
credit terms 2/10, n/60. The goods cost Allied $5,000.
7 Macy returns 50 units because they did not fit the customer's needs (invoice amount: $700). Allied
restores the units, which cost $500, to its inventory.
8 Macy discovers that 50 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 $300 to compensate for
the damage.
15 Allied receives payment from Macy for the amount owed on the May 5 purchase;
returns, allowances, and any cash discount.
payment is net of

X Answer is not complete.
No
Date
General Journal
Debit
Credit
1
May 03
Merchandise inventory
10,000
Cash
10,000
2
May 05
Accounts receivable
7,000
Sales
7,000
3
May 05
Merchandise inventory
500 X
Cost of goods sold
500 X
4
May 07
Sales returns and allowances
700
Accounts receivable
700
May 07
Merchandise inventory
500
Cost of goods sold
500
May 08
Accumulated depreciation
X,
300
Accounts receivable
300
7
May 15
Cash
6,000 X
Accounts receivable
6,000 X

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On May 5 th,

Cost of goods sold = $5000

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