1 Part 1 of 2 2 points 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 $8 cash per unit (for a total cost of $16,000). May 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $8,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,200). Allied restores the units, which cost $800, to its inventory. May & 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 $400 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 journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. Answer is not complete. No Date May 03 General Journal Debit Credit Merchandise inventory Cash 16,000 16.000 2 May 05 Accounts receivable Sales 3 May 05 Cost of goods sold Merchandise inventory 4 May 07 Sales returns and allowances Accounts receivable 0 12,000 12.000 8.000 - 9 8,000 1.200 1,200 5 May 07 Merchandise inventory Cost of goods sold May 08 Sales returns and allowances Accounts receivable 7 May 15 Cash Sales discounts 800 800 400- 400 18,200 x 208 *