Homework answers / question archive / Required information (The following information applies to the questions displayed below

Required information (The following information applies to the questions displayed below

Accounting

Share With

Required information (The following information applies to the questions displayed below.) 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 $7 cash per unit (for a total cost of $21,000).

5 Allied sold 1,500 of the units in inventory for $11 per unit (invoice total: $16,500) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $10,500.

7 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $1,650). Allied restores the units, which cost $1,050, 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 $450 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.