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 $10 cash per unit (for a total cost of $20,000). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory. May 8 Macy discovers that 200 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. Prepare the appropriate journal entries for Macy Company 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date May 03 General Journal Debit Credit No journal entry required 2 May 05 Cost of goods sold * 21,000 Merchandise inventory 0 21,000 3 May 07 Purchases returns and allowances 1,750 Accounts receivable 1,750 4 May 08 Sales returns and allowances Accounts receivable 5 May 15 Cash 00 300 300 18,950 0 No OP ded 1 Date May 03 No journal entry required General Journal 2 May 05 Cost of goods sold Merchandise inventory 3 May 07 4 May 08 Purchases returns and allowances Accounts receivable Sales returns and allowances Accounts receivable 5 May 15 Cash Accounts receivable Debit Credit 21,000 21,000 1,750 1,750 300- 18,950 300 18,950