FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Required information
Use the following information for the Exercises below.
[The following information applies to the questions displayed below]
Allied Merchandisers was organized on May 1. Macy Company 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).
May 5
Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under
credit teres 2/10, n/60. The goods cost Allied $15,000.
May 7
Hacy returns 150 units because they did not fit the customer's needs (Invoice amount: $2,100). Allied restores
the units, which cost $1,500, to its inventory.
May 8
May 15
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.
Allied receives payment from Hacy for the amount owed on the May 5 purchase; payment is net of returns,
allowances, and any cash discount.
Exercise 4-6 (Algo) Recording sales, sales returns, and sales allowances LO P2
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross
method.
View transaction list
Journal entry worksheet
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Transcribed Image Text:Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below] Allied Merchandisers was organized on May 1. Macy Company 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). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit teres 2/10, n/60. The goods cost Allied $15,000. May 7 Hacy returns 150 units because they did not fit the customer's needs (Invoice amount: $2,100). Allied restores the units, which cost $1,500, to its inventory. May 8 May 15 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. Allied receives payment from Hacy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Exercise 4-6 (Algo) Recording sales, sales returns, and sales allowances LO P2 Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. View transaction list Journal entry worksheet
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