Required information Use the following information for the Exercises below. [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 $8 cash per unit (for a total cost of $16,000). May 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $8,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,200). Allied restores the units, which cost $800, 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 $400 to compensate for the damage. May 15 Allied receives payment from Hacy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Exercise 4-7 (Algo) Effects of sales transactions on income statement LO P2 Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify the accounts and amounts (including+ or -) for each transaction. Income Statement Components Sales Sales discounts Sales retums and allowances Net sales May 3 Increase/Decrease Amount May 5 Increase/Decrease May 7 Amount Increase/Decrease Amount May 8 Increase/Decrease Amos
Required information Use the following information for the Exercises below. [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 $8 cash per unit (for a total cost of $16,000). May 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $8,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,200). Allied restores the units, which cost $800, 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 $400 to compensate for the damage. May 15 Allied receives payment from Hacy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Exercise 4-7 (Algo) Effects of sales transactions on income statement LO P2 Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify the accounts and amounts (including+ or -) for each transaction. Income Statement Components Sales Sales discounts Sales retums and allowances Net sales May 3 Increase/Decrease Amount May 5 Increase/Decrease May 7 Amount Increase/Decrease Amount May 8 Increase/Decrease Amos
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Topic Video
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Subject :- Accouning
![Required information
Use the following information for the Exercises below.
[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 $8 cash per unit (for a total cost of $16,000).
May 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $8,000.
May 7
Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,200). Allied
restores the units, which cost $800, 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 $400 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...
Exercise 4-7 (Algo) Effects of sales transactions on income statement LO P2
Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify the
accounts and amounts (including+ or -) for each transaction.
Income Statement Components
Sales
Sales discounts
Sales retums and allowances
Net sales
May 3
Increase/Decrease
Amount
Denu
May 5
Increase/Decrease
2 2 af 3. !!!
May 7
Amount Increase/Decrease Amount
Navt S
Check my work
May 8
Increase/Decrease
Amo](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F83b62d92-ae46-4dd3-8277-7ec31e6fe3f8%2Fcafb9a20-8459-49b9-909c-510ce65284c3%2Fyrfs9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Use the following information for the Exercises below.
[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 $8 cash per unit (for a total cost of $16,000).
May 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $8,000.
May 7
Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,200). Allied
restores the units, which cost $800, 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 $400 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...
Exercise 4-7 (Algo) Effects of sales transactions on income statement LO P2
Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify the
accounts and amounts (including+ or -) for each transaction.
Income Statement Components
Sales
Sales discounts
Sales retums and allowances
Net sales
May 3
Increase/Decrease
Amount
Denu
May 5
Increase/Decrease
2 2 af 3. !!!
May 7
Amount Increase/Decrease Amount
Navt S
Check my work
May 8
Increase/Decrease
Amo
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