Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below.] The transactions listed below are typical of those involving Amalgamated Textiles and American Fashions.

image text in transcribed

Required information [The following information applies to the questions displayed below.] The transactions listed below are typical of those involving Amalgamated Textiles and American Fashions. Amalgamated is a wholesale merchandiser and American Fashions is a retail merchandiser. Assume all sales of merchandise from Amalgamated to American Fashions are made with terms n/60, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended December 31 a. Amalgamated sold merchandise to American Fashions at a selling price of $230,000. The merchandise had cost Amalgamated $175,000. b. Two days later, American Fashions returned goods that had been sold to the company at a price of $20,000 and complained to Amalgamated that some of the remaining merchandise differed from what American Fashions had ordered. Amalgamated agreed to give an allowance of $5,000 to American Fashions. The goods returned by American Fashions had cost Amalgamated $15,270. c. Just three days later, American Fashions paid Amalgamated, which settled all amounts owed. Required: 1. For each of the events (a) through (c), indicate the amount and direction of the effect on Amalgamated Textiles in terms of the following items. (Enter any decreases to account balances with a minus sign.) Sales Sales Cost of Goods Sold Sales Returns Net Sales Gross Profit Transaction Revenues Allowances C

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Gleim CIA Review Part 3 Internal Audit Knowledge Elements

Authors: Irvin N. Gleim

2018 Edition

1618541153, 978-1618541154

More Books

Students also viewed these Accounting questions