Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. May 3 Allied made its first and only purchase of inventory for the poriod on May 3 for 1,000 units at a price of $7 cash per unit (for a total cost of $7,000 ). Allied sold 500 of the units in inventory for $11 per unit (invoice totals $5,500 ) to Macy Co. under credit terms 2/10,n/60. The goods cost Allied $3,500. 7 Macy returns 50 units because they did not f it the customer's needs (invoice amount: $550 ). Allied restores the units, which cost $350, to its inventory. 8 Macy discovers that 50 units are scuffed but are atili of use and, therefore, keeps the units. Milied gives a price reduction (allowance) and credits Macy' a accounta recelvable for 5150 to compenato for the damage. 15 Allied receives payment from Macy for tht amount owed on the May 5 purchase paysent is net of returns, allowances, and any cash dincount. Exercise 5-5 Recording purchases, purchases returns, and purchases allowances LO P1 Prepare the appropriate journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system, and purchases these units for resale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)