Question

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 restores the units, which cost $1,800, 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 $1,200 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.

2 3 4 5 6 7 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). Note: Enter debits before credits. Date General Journal Debit Credit May 03

Answer 1

Answer
Journal entry
Date	General Journal	Debit	Credit
May-03	Merchandise inventory	$     36,000
	Cash		$     36,000
	(To record merchandise)
May-05	Accounts receivable	$     24,000
	Sales		$     24,000
May-05	Cost of goods sold	$     18,000
	Merchandise inventory		$     18,000
May-07	Sales returns and allowances	$       2,400
	Accounts receivable		$       2,400
May-07	Merchandise inventory	$       1,800
	Cost of goods sold		$       1,800
May-08	Sales returns and allowances	$       1,200
	Accounts receivable		$       1,200
May-15	Cash	$     19,992
	Sales discounts	$          408		20400*2%
	Accounts receivable		$     20,400	(24000-2400-1200)