$[$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 $$9$ cash per unit $($for a total cost of $$9,000).$

May $5$ Allied sold $500$ of the units in inventory for $$13$ per unit $($invoice total: $$6,500)$ to Macy

Company under credit terms $\frac{2}{10},\frac{n}{60}.$ The goods cost Allied $$4,500.$

May $7$ Macy returns $50$ units because they did not fit the customer's needs $($invoice amount:

$$650.$ Allied restores the units, which cost $$450,$ 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 $$250$ 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 $4-6($Algo$)$ Recording sales, sales returns, and sales allowances LO P$2$

Irepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system

nd the gross method.

Journal entry worksheet

Allied receives payment from Macy for the amount owed on the May $5$

purchase; payment is net of returns, allowances, and any cash discount.

Note: Enter debits before credits.