1

Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $9 cash per unit (for a total cost of $18,000).

2

Allied sold 1,000 of the units in inventory for $13 per unit (invoice total: $13,000) to Macy Company under credit terms 2/10, n/60. The goods cost $9,000 to Allied.

3

Macy returns 100 units because they did not fit the customers needs (invoice amount: $1,300). Allied restores the units, which cost $900, to its inventory.

4

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 $500 to compensate for the damage.

5

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

Required information [The following information applies to the questions displayed below.] Allied Merchandisers was organized on May 1. Macy Company 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 $9 cash per unit (for a total cost of $18,000 ). May 5 Allied sold 1,000 of the units in inventory for $13 per unit (invoice total: $13,000 ) to Macy Company under credit terms 2/10,n/60. The goods cost Allied $9,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,300 ). Allied restores the units, which cost $900, to its inventory. May 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 $500 to compensate for the damage. May 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 Company 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field