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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 $7 cash per unit (for a total cost of $14,000 ). May 5 Allied sold 1,000 of the units in inventory for $11 per unit (invoice total: $11,000 ) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $7,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,100 ). Allied restores the units, which cost $700, 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 $300 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. Journal entry worksheet 4567 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $7 cash per unit (for a total cost of $14,000 ). Note: Enter debits before credits. 1 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $7 cash per unit (for a total cost of $14,000 ). 2 Allied sold 1,000 of the units in inventory for $11 per unit (invoice total: $11,000 ) to Macy Company 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: $1,100 ). 5 Allied restores the units, which cost $700, to its inventory. Note : = journal entry has been entered - Neluiv ule ual vi yuuds suiu. 4 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,100 ). 5 Allied restores the units, which cost $700, 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 $300 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. Note : = journal entry has been entered