Question

 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 Macy returns 150 units because they did not fit the customen's needs (invoice amount: $2, 100). Allied restores the units, which cost $1,500, to its inventory.

 8 Macy discovers that 150 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 $900 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.

 1 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

 2 Allied sold 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

 3 Record the cost of goods sold.

 4 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $2,100

 5 Allied restores the units, which cost $1,500, to its inventory.

 6 Macy discovers that 150 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 $900 to compensate for the damage.

 7 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.

Answer 1

Journal entries : Allied Company

Date	General Journal	Debit	Credit
May 3	No Journal entry
May 5	Account receivable	21000
	Sales revenue		21000
	Cost of goods sold	15000
	Merchandise inventory		15000
May 7	Sales return and allowance	2100
	Account receivable		2100
	Merchandise inventory	1500
	Cost of goods sold		1500
May 8	Sales return and allowance	900
	Account receivable		900
May 15	Cash (18000*98%)	17640
	Sales discount	360
	Account receivable (21000-2100-900)		18000