80.2K

Verified Solution

Link Copied!

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 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, e90) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $15,000. 7 Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory. 8 Macy discovers that 200 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 $388 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. Exercise 5-4 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

Answer & Explanation Solved by verified expert

See Answer