$[$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 $1,000$ units at a price of $$8$ cash per unit $($for a total cost of $$8,000).$

May $5$ Allied sold $500$ of the units in inventory for $$12$ per unit $($invoice total: $$6,000)$ to Macy Company under credit terms $2/10,$ n$/60.$ The goods cost Allied $$4,000.$

May $7$ 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.

May $8$ Macy discovers that $50$ 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 $$200$ 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.

Exercise $4-7($Algo$)$ Effects of sales transactions on income statement LO P$2$

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.Answer is complete but $n$

$\backslash$table$[[$Income Statement Components,May $3,$May $5,\backslash$table$[[$May $7],[$Increase$/$Decrease$]]],[$Increase$/$Decrease$,$Amount,Increase$/$Decrease$,$Amount$],[$Sales$,,,(+)$ increase,$8,000,],[$Sales discounts$],[$Sales returns and allowances,,,,,$(+)$ increase$],[$Net sales,,,$(+)$ increase,$8,000x,(-)$ decrease$],[$Cost of goods sold,,,$(+)$ increase,$6,000ox,(-)$ decrease$],[$Gross profit,,,$(+)$ increase,$4,000x,(-)$ decrease$]]$Answer is complete but not entirely correct.

$\backslash$table$[[5,,$May $7,$May $8,$May $15],[$Amount$,$Increase$/$Decrease$,$Amount,Increase$/$Decrease$,$Amount,Increase$/$Decrease$,$Amount$],[,8,000ox,,,,,,],[,,,,,(+)$ increase,$256$