Allied Parts, a wholesaler, was organized on May 1, 2010, and made its first pur
ID: 2360700 • Letter: A
Question
Allied Parts, a wholesaler, was organized on May 1, 2010, and made its first purchase of merchandise on May 3. The purchase was for 1,200 units at a price of $10 per unit. On May 5, Allied Parts sold 720 of the units for $14 per unit to Baker Co. Terms of the sale were 2/10, n/60. Ignore sales taxes. -Prepare entries in general journal (Debit/Credit) for Allied Parts to record the May 5 sale and each of the following separate transactions a through c. a. On May 7, Baker returns 252 units because they did not fit its customer's needs. b. On May 8, Baker discovers that 60 units are damaged but are still of some use and, therefore, keeps the units. Allied Parts sends Baker a credit memorandum for $360 to compensate for the damage. c. On May 15, Baker discovers that 72 units are the wrong color. Baker keeps 43 of these units because Allied sends a $92 credit memorandum to compensate. However, Baker returns the remaining 29 units to Allied.Explanation / Answer
Date Particulars Debit Credit
May 5 Accounts Receviable-Baker 10,080
Sales 10,080
(sold 720 units @14)
May 7 Sales- Return 3,528
Accounts Receviable -Baker 3,528
(Sales Return 252 units)
May 8 Sales- Discount 3,60
Accounts Receviable - Baker 3,60
(Discount given due to damage parts)
May 15 Sales- Discount 92
Accounts Receviable - Baker 92
(Discount given due to colour)
May 7 Sales- Return 1,008
Accounts Receviable -Baker 1,008
(Sales Return 72 units)
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