Amalgamated to American Fashions are made with terms nt60. and the two companies use perpetual inventory systems. Assume the fol
lowing transactions between the two companies occurred in the order listed during the year ended December 31.
a. Amalgamated merchandise to American Fashions at a selling price of $315,000. The merchandise had cost Amalgamated $209,000.
b. Two days later. American Fashions returned goods that had been sold to the company at a price of S36.SOO and complained to Amalgamated that some of the remaining merchandise differed from what American Fashions had ordered. Amalgamated agreed to give an allowance of $5,000 to American Fashions. The goods returned by American Fashions had cost Amalgamated $23.770.
c Just three days later. American Fashions paid Amalgamated. which settled an amounts owed.
Prepare the journal entries that Amalgamated Textiles would record.
a. Amalgamated merchandise to American Fashions at a selling price of $315,000. The merchandise had cost Amalgamated $209,000.
b. Two days later. American Fashions returned goods that had been sold to the company at a price of S36.SOO and complained to Amalgamated that some of the remaining merchandise differed from what American Fashions had ordered. Amalgamated agreed to give an allowance of $5,000 to American Fashions. The goods returned by American Fashions had cost Amalgamated $23.770.
c Just three days later. American Fashions paid Amalgamated. which settled an amounts owed.
Prepare the journal entries that Amalgamated Textiles would record.
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