Answer:
Allied Merchandisers
Journal Entries:
May 3 Debit Inventory $22,000
Credit Cash $22,000
To record the purchase of goods for cash.
May 5 Debit Accounts receivable (Macy Co.) $15,000
Credit Sales revenue $15,000
To record the sale of goods on credit, terms 2/10, n/60.
Debit Cost of goods sold $11,000
Credit Inventory $11,000
To record the cost of goods sold.
May 7 Debit Sales Returns $1,500
Credit Accounts receivable (Macy Co.) $1,500
To record the return of 100 units.
Debit Inventory $1,100
Credit Cost of goods sold $1,100
To record the cost of goods returned.
May 8 Debit Sales Allowances $700
Credit Accounts receivable (Macy Co.) $700
To record the sales allowance given.
May 15 Debit Cash $12,544
Debit Cash Discounts $256
Credit Accounts receivable (Macy Co.) $12,800
To record the receipt of cash for full settlement of account.
Explanation:
a) Data and Analysis:
May 3 Inventory $22,000 Cash $22,000
May 5 Accounts receivable (Macy Co.) $15,000 Sales revenue $15,000 terms 2/10, n/60.
Cost of goods sold $11,000 Inventory $11,000
May 7 Sales Returns $1,500 Accounts receivable (Macy Co.) $1,500
Inventory $1,100 Cost of goods sold $1,100
May 8 Sales Allowances $700 Accounts receivable (Macy Co.) $700
May 15 Cash $12,544 Cash Discounts $256 Accounts receivable (Macy Co.) $12,800
