Required information Use the following information for the Exercises 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 1,000 units at a price of $8 cash per unit (for a total cost of $8,000). 5 Allied sold 500 of the units in inventory for $12 per unit (invoice total: $6,000) to Macy Co. under credit terms 2/10, n/60. The goods cost $4,000 to Allied. 7 Macy returns 50 units because they did not fit the customer's needs (invoice amount: $600). Allied restores the units, which cost $400, to its inventory. 8 Macy discovers that 50 units are scuffed but are still of use and, therefore, keeps the units. Allied sends Macy a credit memorandum for $200 toward the original invoice amount 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. Exercise 5-5 Recording purchases, purchases returns, and purchases allowances LO P1 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, and purchases these units for resale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet Credit NoDate 1 May 03 General Journal Merchandise inventory Cash Debit 1,000 1,000 2 May 05 4,000 Accounts receivable Sales 4,000 3 May 07 8,000 SEASE Cost of goods sold Merchandise inventory 8,000 May 08 1,200 Sales returns and allowances Accounts receivable 1,200 5 May 15 Sales Sales discounts Accounts receivable 10,192 208 10,400