Allied
Parts was organized on May 1, 2015, and made its first purchase of
merchandise on May 3. The purchase was for 1,200 units at a price of $11
per unit. On May 5, Allied Parts sold 720 of the units for $15 per unit
to Baker Co. Terms of the sale were 2/10, n/60.
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| a. |
On
May 7, Baker returns 252 units because they did not fit the customer's
needs. Allied Parts restores the units to its inventory.
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| b. |
On
May 8, Baker discovers that 60 units are damaged but are still of some
use and, therefore, keeps the units. Allied Parts sends Baker a credit
memorandum for $420 to compensate for the damage.
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| c. |
On
May 15, Baker discovers that 72 units are the wrong color. Baker keeps
43 of these units because Allied Parts sends a $92 credit memorandum to
compensate. Baker returns the remaining 29 units to Allied Parts. Allied
Parts restores the 29 returned units to its inventory.
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|
Prepare
entries for Allied Parts to record the May 5 sale and each of the above
separate transactions using a perpetual inventory system.
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Thank you
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