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 Co. 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 $8 cash per unit (for a total cost of $24,000).
		5		Allied sold 1,500 of the units in inventory for $12 per unit (invoice total: $18,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $12,000.
		7		Macy returns 150 units because they did not fit the customers needs (invoice amount: $1,800). Allied restores the units, which cost $1,200, to its inventory.
		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 $600 to compensate for the damage.
		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.

Exercise 4-4 Recording sales, sales returns, and sales allowances LO P2

Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. 2) (May 05) Allied sold 1,500 of the units in inventory for $12 per unit (invoice total: $18,000) to Macy Co. under credit terms 2/10, n/60.

3) (May 5) Record the cost of goods sold.

4) May 07 Macy returns 150 units because they did not fit the customers needs (invoice amount: $1,800).

5) (May 07) Allied restores the units, which cost $1,200, to its inventory.

6) (May 08) 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 $600 to compensate for the damage.

7) (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.

The options are the same for every table 1 through 7

Exercise 4-5 Recording purchases, purchases returns, and purchases allowances LO P1

Prepare the appropriate journal entries for Macy Co. 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2) (May 05) Allied sold 1,500 of the units in inventory for $12 per unit (invoice total: $18,000) to Macy Co. under credit terms 2/10, n/60. The goods cost $12,000 to Allied.

3) (May 07) Macy returns 150 units because they did not fit the customers needs (invoice amount: $1,800). Allied restores the units, which cost $1,200, to its inventory.

4) (May 08) 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 $600 to compensate for the damage.

5) (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.

All the options are the same for the second table 1 through 5

• No journal entry required
• Accounts payable
• Accounts receivable
• Accumulated depreciation
• Additional paid-in capital
• Bond premium
• Bonds payable
• Building
• Cash
• Common stock
• Cost of goods sold
• Delivery expense
• Depreciation expense
• Discount on bonds payable
• Dividends declared
• Finance costs
• Goodwill
• Interest expense
• Interest income
• Interest payable
• Interest receivable
• Land
• Merchandise inventory
• Miscellaneous expenses
• Other expenses
• Sales
• Sales discounts
• Sales returns and allowances

Journal entry worksheet 2 3 4 5 6 7 Allied made its first and only purchase of inventory for the period on May 3 for 3,000 units at a price of $8 cash per unit (for a total cost of $24,000). Note: Enter debits before credits. Date General Journal Debit Credit May 03