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.

Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below] Alited Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (sellet) 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 58 cash per unit (for a total cost of $16,000 ). May 5 Allied sold 1 , eee of the units in inventory for $12 per unit (invoice total: $12,000 ) to Macy Company under credit terns 2/10,n/60. The goods cost Allied $8,000. May 7 Macy returns 100 units because they did not fit the custoner's needs (invoice anount: $1,200 ). Allied restores the units, which cost $800, to its inventory. May 8 Macy discovers that 100 units are scuffed but are stili of use and, therefore, keeps the units. Allied gives a price reduction (atlowance) and credits Macy's accounts receivable for $49e to conpensate for the danage. May 25 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 oppropriate journal entries for Macy Company to record each of the Moy transactions. Macy is a fetailer 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. Journal entry worksheet 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 $400 to compensate for the damage. Note: Enter debits before credits. Journal entry worksheet Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000 ) to Macy Company under credit terms 2/10,n/60. The goods cost $8,000 to Allied. Note: Enter debits before credits. Journal entry worksheet 5 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $8 cash per unit (for a total cost of $16,000 ). Note: Enter debits before credits. Journal entry worksheet Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,200). Allied restores the units, which cost $800, to its inventory. Note: Enter debits before credits. 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