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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

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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 210,n60. 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.
Use the above informations, analyze each transaction by indicating its effects on the income statement-specifically, identify the
accounts and amounts (including + or -) for each transaction.
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