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Part $1$ of $2$

Required information

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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 $\frac{2}{10},\frac{n}{60}.$ 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 $8$ 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 $$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.

Journal entry worksheet

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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).$

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$May $03,,,],[,,,],[,,,],[,,,],[,,,],[,,,]]$