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 Company under credit terms 2/10, n/60. The goods cost $11,000 to Allied. 3 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,500). Allied restores the units, which cost $1,100, 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 $700 to compensate for the damage. Allied sold 1,000 of the units in inventory for $15 per unit (invoice total: $15,000) to Macy Company under credit terms 2/10, n/60. The goods cost $11,000 to Allied. 3 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,500). Allied restores the units, which cost $1,100, to its inventory. 4 Macy discovers that 100 units are scuffed but re 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. 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. Note: journal entr Required information Use the following information for the Exercises below. [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 $11 cash per unit (for a total cost of $22,000). May 5 Allied sold 1,000 of the units in inventory for $15 per unit (invoice total: $15,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $11,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,500). Allied restores the units, which cost $1,100, 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 $700 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. Exercise 4-8 (Algo) Recording purchases, purchases returns, and purchases allowances LO P1 Prepare the appropriate inurnal entries for M