cost $900, to itsinventory.May 8 Macy discovers.that 100 unitsare scuffed butare still of useand, therefore,keeps the units.Allied gives aprice reduction(allowance) andcredits Macy'saccountsreceivable for$500 tocompensate forthe damage.May 15 Allied receivespayment from Macyfor the amountowed on the May 5purchase; paymentis net ofreturns,allowances, andany cashdiscount.Prepare journal entries to record thefollowing transactions for Allied assumingit uses a perpetual inventory system andthe gross method. Allied Merchandisers wasorganizedon May 1. Macyis a majorCompanycustomer (buyer) of Allied(seller) products.May 3 Allied made itsfirst and onlypurchase ofinventory for theperiod on May 3for 2,000 unitsat a price of $9cash per unit(for a total costof $18,000).May 5 Allied sold 1,000of the units ininventory for $13.per unit (invoicetotal: $13,000)to Macy Companyunder creditterms 2/10, n/60.The goods costAllied $9,000.May 7 Macy returns 100units becausethey did not fitthe customer'sneeds (invoiceamount: $1,300).Allied restores

Name: cost $900, to itsinventory.May 8 Macy discovers.that 100 unitsare scu
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Description: cost $900, to itsinventory.May 8 Macy discovers.that 100 unitsare scuffed butare still of useand, therefore,keeps the units.Allied gives aprice reduction(allowance) andcredits Macy'saccountsreceivable for$500 tocompensate forthe damage.May 15 Allied

The journal entries are prepared to record the transactions on regular basis. The account…

Business

Accounting

Allied Merchandisers was organized on May 1. Macy is a major Company 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). May 5 Allied sold 1.000

Allied Merchandisers was organized on May 1. Macy is a major Company 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). May 5 Allied sold 1.000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 47P

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