May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,898 units at a price of $9 cash per unit (for a total cost of $18,000)
5 Allied sold 1,000 of the units in inventory for $13 per unit (invoice total: $13,299) to Macy Co. under credit terms 2/10, n/6e. The goods cost Allied $9,889.
7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,300). Allied restores the units, which cost $900, to its inventory.
8 Macy discovers that 100 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 $500 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.
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.
Answer- Journal Entries in the books of Macy Co.
Date | General Journal | Debit | Credit |
May 3 | No Journal Entry Required | ||
May 5 | Merchandise Inventory | 13,000 | |
Accounts Payable | 13,000 | ||
(To record the purchase of inventory) | |||
May 7 | Accounts Payable | 1,300 | |
Merchandise Inventory | 1,300 | ||
(To record the purchase return) | |||
May 8 | Accounts Payable | 500 | |
Merchandise Inventory | 500 | ||
(To record the allowance to Macy) | |||
May 15 | Accounts Payable ($13,000-$1,300-$500) | 11,200 | |
Merchandise Inventory ($13,000-$1,300-$500)*2% | 224 | ||
Cash ($13,000-$1,300-$500)*98% | 10,976 | ||
(To record the payment on account) |
May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,898 units at a price of $9 cash per unit (for a total cost of $18,000)
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 $9 cash per unit (for a total cost of $18,000). 5 Allied sold 1,00e of the units in inventory for $13 per unit (invoice total: $13,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $9,000. 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,300). Allied restores the...
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 $12 cash per unit (for a total cost of $36,000). 5 Allied sold 1,500 of the units in inventory for $16 per unit (invoice total: $24,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $18,000. 7 Macy returns 150 units because they did not fit the customer’s needs (invoice amount: $2,400). Allied...
May3Allied made its first and only purchase of inventory for the period on May 3 for 3,000 units at a price of $12 cash per unit (for a total cost of $36,000).5Allied sold 1,500 of the units in inventory for $16 per unit (invoice total: $24,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $18,000.7Macy returns 150 units because they did not fit the customer’s needs (invoice amount: $2,400). Allied restores the units, which cost $1,800,...
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 2,000 units at a price of $10 cash per unit (for a total cost of $20,000). 5 Allied sold 1,see of the units in inventory for $14 per unit (invoice total: 321,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $15, 000. 7...
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 2,000 units at a price of $10 cash per unit (for a total cost of $20,000). 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21, 00e) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $15,...
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 $10 cash per unit (for a total cost of $30,000) 5 Allied soid 1, 500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $15,000. 7...
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 2,000 units at a price of $7 cash per unit (for a total cost of $14,000).5 Allied sold 1,000 of the units in inventory for $11 per unit (invoice total: $11,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $7,000.7 Macy...
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 2,000 units at a price of $9 cash per unit (for a total cost of $18,000). 5 Allied sold 1,000 of the units in inventory for $13 per unit (invoice total: $13,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied...
Required information [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 2,000 units at a price of $10 cash per unit (for a total cost of $20,000). 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to...
Required information {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 2,000 units at a price of $10 cash per unit (for a total cost of $20,000). 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to...