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 2,800 units at a price of 58 cash per unit (for a total cost of $16,000). 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000) to Hacy Co. under credit terms 2/10, 1/50. The goods cost Allied $8,000. 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,200) Allied restores the units, which cost $800, to its inventory. & Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied gives price reduction (allowance) and credits Macy's accounts receivable for $400 to compensate for the damage. 15 Allied receives payment from Macy for the anount 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 complete but not entirely correct. NO Date May 03 Credit 1 General Journal No journal ontry required No journal entry required Debit 03 2 May 05 Merchandise Inventory Accounts payable 12,000 12.000 3 May 07 Accounts payable Morchandise inventory 1.200 1200 4 May 02 Accounts payable 100