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 $10 cash per unit (for a total cost of $20,000). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory. May 8 Macy discovers that 200 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. 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 the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system; it purchases these units for resale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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 $10 cash per unit (for a total cost of $20,000). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory. May 8 Macy discovers that 200 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. 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 the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system; it purchases these units for resale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 4CP: Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and...
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Transcribed Image Text:ded
No
1
2
3
4
5
Date
May 03
May 05
May 07
May 08
May 15
No journal entry required
Cost of goods sold
Merchandise inventory
Purchases returns and allowances
Accounts receivable
General Journal
Sales returns and allowances
Accounts receivable
Cash
Accounts receivable
3
XX
Ⓡ
**
**
Ⓡ
***
Debit
21,000
1,750
300✔
18,950
Credit
21,000
1,750
300
18,950
![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 $10 cash per unit (for a total cost of $20,000).
May 5
Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $15,000.
May 7
Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied
restores the units, which cost $1,250, to its inventory.
May 8
Macy discovers that 200 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.
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 the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the
gross method and a perpetual inventory system; it purchases these units for resale. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account field.)
No
1
2
3
4
5
Date
May 03
May 05
May 07
May 08
May 15
No journal entry required
Cost of goods sold
Merchandise inventory
General Journal
Purchases returns and allowances
Accounts receivable
Sales returns and allowances
Accounts receivable
Cash
3
**
**
**
Ⓡ
Debit
21,000
1,750
300
18,950
o
Credit
21,000
1,750
300](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fffe1ff22-184c-4945-b7e1-1ec1facec45a%2F8f057c80-3f91-4cf2-8ef2-184411d18eec%2F5abyjw_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 $10 cash per unit (for a total cost of $20,000).
May 5
Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $15,000.
May 7
Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied
restores the units, which cost $1,250, to its inventory.
May 8
Macy discovers that 200 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.
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 the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the
gross method and a perpetual inventory system; it purchases these units for resale. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account field.)
No
1
2
3
4
5
Date
May 03
May 05
May 07
May 08
May 15
No journal entry required
Cost of goods sold
Merchandise inventory
General Journal
Purchases returns and allowances
Accounts receivable
Sales returns and allowances
Accounts receivable
Cash
3
**
**
**
Ⓡ
Debit
21,000
1,750
300
18,950
o
Credit
21,000
1,750
300
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