Question

Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.

Answer 1

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