Allied Parts was organized on May 1, 2013, and made its first purchase of merchandise on May 3. The purchase was for 1,700 units at a price of $10 per unit. On May 5, Allied Parts sold 1,020 of the units for $14 per unit to Baker Co. Terms of the sale were 2/10, n/60.

a.

On May 7, Baker returns 357 units because they did not fit the customers needs. Allied Parts restores the units to its inventory.

b.

On May 8, Baker discovers that 85 units are damaged but are still of some use and, therefore, keeps the units. Allied Parts sends Baker a credit memorandum for $510 to compensate for the damage.

c.

On May 15, Baker discovers that 102 units are the wrong color. Baker keeps 61 of these units because Allied Parts sends a $122 credit memorandum to compensate. Baker returns the remaining 41 units to Allied Parts. Allied Parts restores the 41 returned units to its inventory.

Prepare entries for Allied Parts to record the May 5 sale and each of the following separate transactions a through c using a perpetual inventory system.