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 $9 cash per unit (for a total cost of $27,000). | ||
| 5 | Allied sold 1,500 of the units in inventory for $13 per unit (invoice total: $19,500) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $13,500. | |||
| 7 | Macy returns 150 units because they did not fit the customer’s needs (invoice amount: $1,950). Allied restores the units, which cost $1,350, 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 $750 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. |
Question: How does this go into the journal entry?
Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.
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 $9 cash per unit (for a total cost of $27,000). | ||
| 5 | Allied sold 1,500 of the units in inventory for $13 per unit (invoice total: $19,500) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $13,500. | |||
| 7 | Macy returns 150 units because they did not fit the customer’s needs (invoice amount: $1,950). Allied restores the units, which cost $1,350, 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 $750 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. |
Question: Journal Entry?
Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.
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 2,000 units at a price of $11 cash per unit (for a total cost of $22,000). | ||
| 5 | Allied sold 1,000 of the units in inventory for $15 per unit (invoice total: $15,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $11,000. | |||
| 7 | Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,500). Allied restores the units, which cost $1,100, to its inventory. | |||
| 8 | Macy discovers that 100 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 $700 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 journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system; it purchases these units for resale. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)
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