ustomer buyer of Allied seller products Allied Merchandisers

ustomer (buyer) of Allied (seller) products Allied Merchandisers was organized on May 1. Macy Co. is a major c May 10 cash per unit (for a total cost of $20,00) 3 Alied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of S 5 Alied sold 1,500 of the units in invenfory for $14 per unit (invoice total $2 7 Macy returms 125 units because they did not fit the customer\'s needs (invoice amount $1,750) Allied restores the units 8 Macy discovers that 200 units are sculfed but are still of use and, therefore, keeps the 1,000) to Macy Co under credit terms 2/10, n/60. The goods cost $15,000 to Allied. , which cost $1,250, to ils inventory units. Allied sends Macy a credit memorandum for $300 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 the appropriate jounal entries for Macy Co, to record each ot the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system, and purchases these units for resale (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field.) View transaction list Journal entry worksheet 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). Note: Enter debits before credits. General Journal Debit Credit May 03 O Type here to search 61/2018

Solution

Date Account tiltes and explanation Debit Credit May 3. No entry May 5. Merchandise inventory 21000 Accounts payable 21000 (Goods purchased on credit) May 7. Accounts payable 1750 Merchandise inventory 1750 (Inventories returned to supplier) May 8. Accounts payable 300 Merchandise inventory 300 (Credit memorandum received for damaged goods) May 15. Accounts payable 18950 Merchandise inventory (Note:1) 379 Cash 18571 (Cash paid towards credit purchase) Note:1-Computation of cash discount Purchase term is 2/10,n/60.It means If payment is made within 10 days 2% discount is available. Discount=(21000-1750-300)*2%=$ 379