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 3,000 units at a price of $11 cash per unit (for a total cost of $33,000).
5
Allied
sold 1,500 of the units in inventory for $15 per unit (invoice total: $22,500)
to Macy Co. under credit terms 2/10, n/60. The goods cost $16,500 to Allied.
7
Macy
returns 150 units because they did not fit the customer’s needs (invoice
amount: $2,250). Allied restores the units, which cost $1,650, to its
inventory.
8
Macy
discovers that 150 units are scuffed but are still of use and, therefore, keeps
the units. Allied sends Macy a credit memorandum for $1,050 toward the original
invoice amount 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.
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. (Allied estimates returns using an adjusting entry at each year-end.)
Tags: online colleges that are regionally accredited, online colleges for psychology and sociology, best online colleges for teaching, online colleges for active duty military, colleges for military spouses online, online colleges computer programming, graphic design colleges online, regionally accredited online colleges with low tuition, online colleges for criminology, cost of online colleges
