Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (seller) products. May 3 Altied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $10 cash per unit (for a total cost of $20,000 ). May 5 Allied sold 1 ,ee0 of the units in inventory for $14 per unit (invoice total: $14,000 ) to Macy Company under credit terms 2/10,n/60. The goods cost Allied $10,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,400 ). Altied restores the units, which cost $1,000, 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 (allowance) and credits Macy's accounts receivable for $600 to compensate for the danage. May 15 Allied receives payment from Macy for the anount 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. Journal entry worksheet Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $10 cash per unit (for a total cost of $20,000 ). Note: Enter debits before credits. Journal entry worksheet 5 Allied sold 1,000 of the units in inventory for $14 per unit (invoice total: $14,000 ) to Macy Company under credit terms 2/10,n/60. The goods cost $10,000 to Allied. Note: Enter debits before credits. Journal entry worksheet Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,400 ). Allied restores the units, which cost $1,000, to its inventory. Note: Enter debits before credits. Journal entry worksheet 1 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 $600 to compensate for the damage. Note: Enter debits before credits. Journal entry worksheet (1) 2 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
