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 $9 cash per unit (for a total cost of $18,000). May 5 Allied sold 1,000 of the units in inventory for $13 per unit (invoice total: $13,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $9,000. May 7 Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,300). Allied restores the units, which cost $900, 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 $500 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field
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 $9 cash per unit (for a total cost of $18,000). May 5 Allied sold 1,000 of the units in inventory for $13 per unit (invoice total: $13,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $9,000. May 7 Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,300). Allied restores the units, which cost $900, 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 $500 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.10AMCP
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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 2,000 units at a price of $9 cash per unit (for a total cost of $18,000). |
---|---|
May 5 | Allied sold 1,000 of the units in inventory for $13 per unit (invoice total: $13,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $9,000. |
May 7 | Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,300). Allied restores the units, which cost $900, 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 $500 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.
Note: If no entry is required for a transaction/event, select "No
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