Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

returns, allowances, and any cash discount. Prepare journal entries to record the following transactions for Allied assuming it method. 1 Allied made its first and

image text in transcribed
image text in transcribed
image text in transcribed
returns, allowances, and any cash discount. Prepare journal entries to record the following transactions for Allied assuming it method. 1 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $12 cash per unit (for a total cost of $24,000 ). 2 Allied sold 1,000 of the units in inventory for $16 per unit (invoice total: $16,000 ) to Macy Company under credit terms 2/10,n/60. 3 Record the cost of goods sold. 4 Macy returns 100 units because they did not fit the customer's needs (involce amount: $1,600 ). 5 Alled restores the units, which cost $1,200, to its inventory. Note : a journal entry has been entered 5 Allied restores the units, which cost $1,200, to its inventory, 6 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 recelvable for $800 to compensate for the damage. 7 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Required information [The following information applies to the questions displayed betow] Allied Merchandisers was organized on May 1. Macy Compery is a major customer (buyen) of Amed (selen) products. Mhy 3 Milied nade ite Llrut and enly purehane of Inventory for the period on May 3 for 2,050 axile at a price of $12 canh per unit (for a tatal oont of $24,650}. May 5 MLlied mold 1, 000 of the unita in inventory for 516 per whit (invaice totali 516,050) to macy Coepany ander eredit terma 2/10, n/60. The poode cost Al1ied $12,000. restores the units, which coot 31,200 , to ita inventory. May s Macy discovers that 100 unlth are scutted but are atil1 of use and, therefore, keepe the anits. MBHied given a price reduction (allowance) and eredits macy's accounts receivable for 5905 to conpensats for the damse. Kay is allied receiven payment from Macy for the anoant oved on the May 5 parchases paysent is net of returne, allownces, and any caah diacount. Prepare the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retaler that uses the gross method and a perpetual irventory 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.) Journal entry worksheet Alled made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $12 cash per unit (for a total cost of $24,000 ). mote: Enter debita before cresta

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

Connect 2-semester For Auditing & Assurance Services A Systematic Approach

Authors: Author

10th Edition

1259292045, 9781259292040

More Books

Students also viewed these Accounting questions

Question

In which ways would you measure training success? Explain.

Answered: 1 week ago

Question

Evaluate Meyers and Browns approach to career development.

Answered: 1 week ago