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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
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 $9 cash per unit (for a total cost of $27,000). May 5 Allied sold 1,500 of the units in inventory for $13 per unit (invoice total: $19,500) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $13,500. May 7 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $1,950). Allied restores the units, which cost $1,350, 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 $750 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. Answer is not complete. No 1 Date May 03 General Journal Debit Credit No journal entry required 2 May 05 Merchandise inventory Accounts payable 27,000 27,000 3 May 07 Accounts payable Merchandise inventory 1,350 1,350 4 May 08 Accounts payable 750 Merchandise inventory 750 5 May 15 Accounts payable Cash 18,225 18,225
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