1 answer

! Required information Use the following information for the Exercises 6-8 below. (Algo) [The following information...

Question:

! Required information Use the following information for the Exercises 6-8 below. (Algo) [The following information applies tAllied 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 unit6 Macy discovers that 150 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price reduct

! Required information Use the following information for the Exercises 6-8 below. (Algo) [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 3,000 units at a price of $10 cash per unit (for a total cost of $30,000). 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $15,000. 7 Macy 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. 8 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. 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 4-6 (Algo) Recording sales, sales returns, and sales allowances LO P2
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). Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, n/60. Record the cost of goods sold. 4 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $2,100). 5 Allied restores the units, which cost $1,500, to its inventory.
6 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. 7 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.

Answers

Journal entries : Allied Company

Date General Journal Debit Credit
May 3 No Journal entry
May 5 Account receivable 21000
Sales revenue 21000
Cost of goods sold 15000
Merchandise inventory 15000
May 7 Sales return and allowance 2100
Account receivable 2100
Merchandise inventory 1500
Cost of goods sold 1500
May 8 Sales return and allowance 900
Account receivable 900
May 15 Cash (18000*98%) 17640
Sales discount 360
Account receivable (21000-2100-900) 18000
.

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