Required information Journal entry worksheet

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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).$

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$May $03,,,],[,,,],[,,,],[,,,],[,,,]]$

$[$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 terms $\frac{2}{10},\frac{n}{60}.$ 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 Macy 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 Allied assuming it uses a perpetual inventory system and the gross

method.

first set:

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).$

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$/60.$

Record the cost of goods sold.

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.

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.

Allied receives payment from Macy for the amount owed on the May $5$ purchase; payment is net of returns, allowances, and any cash discount.

second set $($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.$)$:

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).$

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 $$11,000$ to Allied.

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.

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.

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.

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).$

Note: Enter debits before credits.