**Educational Website Text Transcription and Diagram Explanation**---**Required Information:***(The following information applies to the questions displayed below.)*ABC Merchandisers was organized on May 1. MNM Co. is a major customer (buyer) of ABC (seller) products.- **May 3**: ABC made its first and only purchase of inventory for the period on May 3 for 1,000 units at a price of $12 cash per unit (for a total cost of $12,000). - **May 5**: ABC sold 500 of the units in inventory for $16 per unit (invoice total: $8,000) to MNM Co. under credit terms 2/10, n/60. The goods cost ABC $6,000. - **May 7**: MNM returns 50 units because they did not fit the customer's needs (invoice amount: $800). ABC restores the units, which cost $600, to its inventory. - **May 8**: MNM discovers that 50 units are scuffed but are still of use and, therefore, keeps the units. ABC gives a price reduction (allowance) and credits MNM’s accounts receivable for $480 to compensate for the damage. - **May 15**: ABC receives payment from MNM for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.**Instructions:**Prepare the appropriate journal entries for MNM Co. to record each of the May transactions. MNM is a retailer that uses the gross method and a perpetual inventory system and purchases these units for resale. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)**Journal Entry Worksheet:****Transaction 1:** - **Date**: May 3- **Description**: Allied made its first and only purchase of inventory for the period on May 3 for 1,000 units at a price of $12 cash per unit (for a total cost of $12,000).**Diagram Explanation:**- The worksheet includes fields for the date, general journal, and columns for debit and credit entries.- Instructions are provided to enter debits before credits.- There are navigation arrows to move through different journal entries (from 1 to 5).- Buttons are available for recording entries, **Required Information***The following information applies to the questions displayed below.*ABC Merchandisers was organized on May 1. MNM Co. is a major customer (buyer) of ABC (seller) products.- **May 3:** ABC made its first and only purchase of inventory for the period on May 3 for 1,000 units at a price of $12 each per unit (for a total cost of $12,000).- **May 5:** ABC sold 500 of the units in inventory for $16 per unit (invoice total: $8,000) to MNM Co. under credit terms 2/10, n/60. The goods cost ABC $6,000.- **May 7:** MNM returns 50 units because they did not fit the customer’s needs (invoice amount: $800). ABC restores the units, which cost $600, to its inventory.- **May 8:** MNM discovers that 50 units are scuffed but are still of use and, therefore, keeps the units. ABC gives a price reduction (allowance) and credits MNM's accounts receivable for $400 to compensate for the damage.- **May 15:** ABC receives payment from MNM 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 ABC assuming it uses a perpetual inventory system and the gross method.---**Journal Entry Worksheet**1. **Date:** May 032. **General Journal Entry:** - Allied made its first and only purchase of inventory for the period on May 3 for 1,000 units at a price of $12 each per unit (for a total cost of $12,000).*Note: Enter debits before credits.*- **Debit: Inventory** - **Credit: Cash/Accounts Payable***Additional controls:*- Record entry- Clear entry- View general journalThis educational transcription provides a step-by-step depiction of how to prepare journal entries for inventory transactions using a perpetual inventory system. Each transaction is detailed with dates and actions, and users prepare corresponding journal entries based on this information.

Name: **Educational Website Text Transcription and Diagram Explanation**---
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: **Educational Website Text Transcription and Diagram Explanation**---**Required Information:***(The following information applies to the questions displayed below.)*ABC Merchandisers was organized on May 1. MNM Co. is a major customer (buyer) of ABC