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 $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 ters 2/10, n/6e. 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 imventory. May B 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 Hacy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Exercise 4-6 (Algo) Recording sales, sales returns, and sales allowances LO P2 Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method.
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 $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 ters 2/10, n/6e. 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 imventory. May B 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 Hacy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Exercise 4-6 (Algo) Recording sales, sales returns, and sales allowances LO P2 Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required information
Use the following information for the Exercises below.
[The following information applies to the questions displayed below.)
Alled 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,e00).
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 Hacy for the amount owed on the May 5 purchase; payment is net of returns,
allowances, and any cash discount.
Exercise 4-6 (Algo) Recording sales, sales returns, and sales allowances LO P2
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross
method
Transcribed Image Text:Required information
May 03
Merchandise iventory
art 1 of 3
22,000
Cash
22,000
May 05
Accounts receivable
15,000
Sales
Ints
15,000
May 05
Cost of goods sold
11,000
Merchandise inventory
11,000
May 07
Sales returns and allowances
1,500 O
Accounts receivable
1,500
May 07
Merchandise imventory
1,100
Cost of goods sold
1,100
May 08
Sales returns and allowances
700 O
Accounts receivable
700
May 15
Cash
51,300
Sales discounts
Accounts receivable
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