ari File Edit View History Bookmarks Window Help Hel HW 4-2 Allied Parts was org

Question

ari File Edit View History Bookmarks Window Help Hel HW 4-2 Allied Parts was organized on May 1, 2015, and made its first purchase of merchandise on May 3. The purchase was for 1,900 units at a price of $9 per unit. On May 5, Allied Parts sold 1140 of the units for $13 per unit to Baker Co. Terms of the sale were 2/10, n/60. 10 a. On May 7, Baker returns 399 units because they did not fit the customer's needs. Allied Parts restores the units to its inventory b. On May 8, Baker discovers that 95 units are damaged but are still of some use and. therefore, keeps the units. Allied Parts sends Baker a credit memorandum for $475 to compensate for the damage c. On May 15, Baker discovers that 114 units are the wrong color. Baker keeps 68 of these units because Allied Parts sends a $134 credit memorandum to compensate. Baker returns the remaining 46 units to Allied Parts. Allied Parts restores the 46 returned units to its inventory. Prepare entries for Allied Parts to record the May 5 sale and each of the above separate transactions using a perpetual inventory system. View transaction list MacBook Ai

Explanation / Answer

Solution: Date General Journal Debit Credit May 5 Accounts receivable 14,820 Sales 14,820 Notes: $13 per unit x 1140 units = $14,820 May 5 Cost of goods sold 10,260 Merchandise inventory 10,260 Notes: $9 per unit x 1140 units = $10,260 May 7 Sales returns and allowances 5,187 Accounts receivable 5,187 Notes: $13 per unit x 399 units = $5,187 May 7 Merchandise inventory 3,591 Cost of goods sold 3,591 Notes: $9 per unit x 399 units = $3,591 May 8 Sales returns and allowances 475 Accounts receivable 475 May 15 Sales returns and allowances 732 Accounts receivable 732 Notes: Accepted a return from a customer [$134 + (46 × $13)] = $732 ] May 15 Merchandise inventory 414 Cost of goods sold 414 Notes: $9 per unit x 46 units = $414 Please feel free to ask if anything about above solution in comment section of the question.

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