Prepare entries for allied parts to record the may 5 sale

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Reference no: EM13577619

Allied Parts was organized on May 1, 2013, and made its first purchase of merchandise on May 3. The purchase was for 1,400 units at a price of $11 per unit. On May 5, Allied Parts sold 840 of the units for $15 per unit to Baker Co. Terms of the sale were 2/10, n/60.

a.On May 7, Baker returns 294 units because they did not fit the customer's needs. Allied Parts restores the units to its inventory.

b.On May 8, Baker discovers that 70 units are damaged but are still of some use and, therefore, keeps the units. Allied Parts sends Baker a credit memorandum for $490 to compensate for the damage.

c.On May 15, Baker discovers that 84 units are the wrong color. Baker keeps 50 of these units because Allied Parts sends a $104 credit memorandum to compensate. Baker returns the remaining 34 units to Allied Parts. Allied Parts restores the 34 returned units to its inventory.

Prepare entries for Allied Parts to record the May 5 sale and each of the following separate transactions a through c using a perpetual inventory system.

Reference no: EM13577619

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