70.2K

Verified Solution

Link Copied!

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 2,000 units at a price of $10 cash per unit (for a total cost of $20,000 ). May 5 Allied sold 1,500 of the unite in inventory for $14 per unit (invoice totali $21,000) to Macy Coupany under eredit terms 2/10,n/60. The goods cost Al1ied $15,000. May 7 Macy returns 125 units because they did not fit the customer's needs (involce amount: $1,750 ), A ilied restores the units, whieh cost $1,250, to its inventory. May 8 Macy discovers that 200 units are scuffed but are still of use and, therefore, keeps the units. Al1led gives a price reduction (allowance) and eredits Nacy' b account receivable for $300 to compensate for the damage. May 15 Allied receives payment from Macy for the amount owed on the May 5 purchaser payment 1 net of returns, allowances, and any cash discount. Exercise 4-8 (Static) Recording purchases, purchases returns, and purchases allowances LO P1 Prepare the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system; it purchases these units for resale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field

Answer & Explanation Solved by verified expert

See Answer