Required information Use the following information for the Exercises below. [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 Sie cash per unit (for a total cost of $20,000). 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, 1/60. The goods cost Allied $15,000. 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. 8 Macy discovers that 280 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 fron Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Exercise 4-5 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, 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.) Answer is not complete. No General Journal Date May 03 Credit 1 Merchandise inventory Accounts payable Debit 20.000 20,000 2 May 05 21.000 15.000 Accounts receivable Cost of goods sold Sales Merchandise inventory OOOO 21.000 15.000 3 May 07 Sales returns and allowances Merchandise inventory Accounts receivable Cost of goods sold 1.750 1.250 OOOO 1,750 1.250 15,00. 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. 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. 15 Allied receives payment from Macy for the amount owed on the May 5 purchases payment is net of returns, allowances, and any cash discount. Exercise 4-5 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 o 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.) Answer is not complete. NO General Journal Credit Date May 03 Debit 20,000 1 Merchandise inventory Accounts payable 20,000 2 May 05 21,000 15,000 3 Accounts receivable Cost of goods sold Sales Merchandise inventory 21,000 15,000 3 May 07 1,750 1,250 Sales retums and towances Merchandise inventory Accounts receivable Cost of goods sold 1,750 1.250 May 08 300 Sales retums and allowances Accounts receivable 3 300 o 5 May 15 Cash Sales discounts Accounts receivable 18.865 3853 19 250