7 Part 2 of 2 8.33 points Book Hr 03 P 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 3,000 units at a price of $10 cash per unit (for a total cost of $30,000). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terns 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $2,100). Allied restores the units, which cost $1,500, to its inventory. May 8 Macy discovers that 150 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 $900 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. Exercise 4-8 (Algo) Recording purchases, purchases returns, and purchases allowances LO P1 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list
7 Part 2 of 2 8.33 points Book Hr 03 P 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 3,000 units at a price of $10 cash per unit (for a total cost of $30,000). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terns 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $2,100). Allied restores the units, which cost $1,500, to its inventory. May 8 Macy discovers that 150 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 $900 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. Exercise 4-8 (Algo) Recording purchases, purchases returns, and purchases allowances LO P1 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 1MP
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Part 2 of 2
8.33
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10 10
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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 3,000 units at a
price of $10 cash per unit (for a total cost of $30,000).
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 150 units because they did not fit the customer's needs (invoice amount: $2,100).
Allied restores the units, which cost $1,500, to its inventory.
May 8
Macy discovers that 150 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 $900 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.
Exercise 4-8 (Algo) Recording purchases, purchases returns, and purchases allowances LO P1
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.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Journal entry
worksheet
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
May 15
Accounts payable
10
General Journal
Merchandise inventory
Cash
SEP
23
tv
Debil
12,000
Credit
420
21,000
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