Saved Chapter 4 0 Required information Merchandisers was organized on May 1. Mac

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Saved Chapter 4 0 Required information Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products May 3 Allied nade ita first and onl y purchase of inventory for the period on Hay 3 for 2,000 units at 5 Allied sold 1,000 of the unies in ieventory for $13 per unit (invoice total: $13,000) to Macy Co 7 Macy returns 100 units because they did not fit the oustomer's needs (invoice anount: $1,300). 8 Macy discovers that 100 unica are scuffed but are still of use and, therefore, price of $9 cash per unit (for a total çost of $18,000) under credit terma 2/10, n/60. The goods cost Allied $9,000. restores the units, which cost $900, to its inventory Ailied sends Macy a credit menorandun for $500 tovard the original invoice amount to compensate for ok the danage. 15 Alled receivos payment tron Macy tor the anount owed on the May 5 purchase payment is net of returns, allowances, and any cash discount 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, and purchases these units for resale. (0f no entry is required for a transactionievent, "No journal entry requlred" in the first account field.) View transaction list Journal entry worksheet Alied made its first and only purchase of inventory for the peniod on Mav 3 for

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Solution:

Journal Entries - Allide Merchandisers Date Particulars Debit Credit 3-May Inventories Dr $18,000.00            To Cash $18,000.00 (To record inventory purchase) 5-May Accounts receivables Dr $13,000.00            To Sales revenue $13,000.00 (To record sales on account) 5-May Cost of goods sold Dr $9,000.00            To Inventories $9,000.00 (To record cost of goods sold) 7-May Sales returns and allowances Dr $1,300.00            To Accounts receivables $1,300.00 (To record goods returned by customer) 7-May Inventories Dr $900.00            To Cost of goods sold $900.00 (Being inventory returned taken in to stock) 8-May Sales returns and allowances Dr $500.00            To Accounts receivables $500.00 (To record compensation allowed for damages) 15-May Cash Dr ($11,200*98%) $10,976.00 Sales discount Dr $224.00            To Accounts receivables $11,200.00 (To record collection from customer)

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