$1.$ 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).$

$2.$ 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$/60.$

$3.$Record the cost of goods sold.

$4.$ Macy returns $100$ units because they did not fit the customer$$s needs $($invoice amount: $$1,500).$

$5.$ Allied restores the units, which cost $$1,100,$ to its inventory.

$6.$ 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.

$7.$ Allied receives payment from Macy for the amount owed on the May $5$ purchase; payment is net of returns, allowances, and any cash discount.