Allied Merchandisers was organized on May 1. Macy Co. 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 $8 cash per unit (for a total cost of $24,000).

5

Allied sold 1,500 of the units in inventory for $12 per unit (invoice total: $18,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $12,000.

7

Macy returns 150 units because they did not fit the customers needs (invoice amount: $1,800). Allied restores the units, which cost $1,200, to its inventory.

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 $600 to compensate for the damage.

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 Co. 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Required information [The following information applies to the questions displayed below) Allied Merchandisers was organized on May 1, Macy Co. is a major customer buyers 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 $8 cash per unit (for a total cost of $24,000). 5 Allied sold 1,500 of the units in inventory for $12 per unit (invoice total: $18,000 to Macy Co. under credit terms 2/18, 1/6e. The goods cost Allied 7 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $1,880). Allied restores the units, which cost $1,200, to its inventory. 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 $600 to compensate for the damage. 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. repare the appropriate journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that ses the gross method and a perpetual inventory system; it purchases these units for resale. (If no entry is required or a transaction/event, select "No journal entry required" in the first account field.) No Answer is complete but not entirely correct. General Journal Merchandise inventory Cash Date May 03 Credit Debit 24,000 1 X 24.000 2 May 05 18.000 Accounts receivable Sales 18.000 3 > May 07 1.800 Sales returns and allowances Accounts receivable 1,800 4 May 08 600 Sales returns and allowances Accounts receivable x 600 5 May 15 15,600 Cash Sales discounts Accounts receivable 312 15.288