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; it purchases these units for resale.

May 03 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). Debit - Credit

May 05 Allied sold 1,000 of the units in inventory for $11 per unit (invoice total: $11,000) to Macy Co. under credit terms 2/10, n/60. The goods cost $7,000 to Allied. Debit - credit

May 07 Macy returns 100 units because they did not fit the customers needs (invoice amount: $1,100). Allied restores the units, which cost $700, to its inventory.. Debit - Credit

May 08 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. Debit - Credit

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. Debit - Credit

Required information [The following information applies to the questions displayed below.) 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 period on May 3 for 2,000 units at a price of $7 cash per unit (for a total cost of $14,000). 5 Allied sold 1,000 of the units in inventory for $11 per unit (invoice total: $11,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $7,000. 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. 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. 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