Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied...

 

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Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. 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). 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $8,000. 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. 8 Macy discovers that 10e 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. 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment allowances, and any cash discount. May is net of returns, 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. View transaction list Journal entry worksheet 3 6 7 > Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Note: Enter debits before credits. Date General Journal Debit Credit May 15 Cash Sales discounts Accounts receivable Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. 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). 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $8,000. 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. 8 Macy discovers that 10e 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. 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment allowances, and any cash discount. May is net of returns, 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. View transaction list Journal entry worksheet 3 6 7 > Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Note: Enter debits before credits. Date General Journal Debit Credit May 15 Cash Sales discounts Accounts receivable

Answer rating: 100% (QA)

Journal entries in the books of A Merchandisers Date General Journ... View the full answer