5 [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 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). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory. May 8 Macy discovers that 200 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 $300 to compensate for the damage. 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. Exercise 4-8 (Static) 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
5 [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 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). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory. May 8 Macy discovers that 200 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 $300 to compensate for the damage. 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. Exercise 4-8 (Static) 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 4CP: Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and...
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Prepare
![ces
raw
[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 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).
May 5
Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $15,000.
May 7
Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied
restores the units, which cost $1,250, to its inventory.
May 8
Macy discovers that 200 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 $300 to compensate for
the damage.
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.
Exercise 4-8 (Static) 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. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
<
1
2
3
4
5
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).
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Transcribed Image Text:ces
raw
[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 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).
May 5
Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company
under credit terms 2/10, n/60. The goods cost Allied $15,000.
May 7
Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied
restores the units, which cost $1,250, to its inventory.
May 8
Macy discovers that 200 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 $300 to compensate for
the damage.
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.
Exercise 4-8 (Static) 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. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
<
1
2
3
4
5
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).
< Prev
S
5
of 8
TERER
MacBook Air
7
Next >
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