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 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 $$10$ cash per unit $($for a total cost of $$10,000).$

May $5$ Allied sold $500$ of the units in inventory for $$14$ per unit $($invoice total: $$7,000)$ to Macy Company under credit terms $\frac{2}{10},\frac{n}{60}.$ The goods cost Allied $$5,000.$

May $7$ Macy returns $50$ units because they did not fit the customer's needs $($invoice amount: $$700).$ Allied restores the units, which cost $$500,$ 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 $$300$ 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 tha accounts and amounts $($including $+$ or $-)$ for each transaction.

$\backslash$table$[[$Income Statement Components,May $3,$May $5,$May $7,$May $8,$Incre:$],[$Increase$/$Decrease$,$Amount,Increase$/$Decrease$,$Amount,Increase$/$Decrease$,$Amount,Increase$/$Decrease$,$Amount$],[$Sales$,,,,,,?,,,],[$Sales discounts,,$11,18,,,,,,],[$Sales returns and allowances,,,,,,,,,$],[$Net sales,,,,,,,,,$],[$Cost of goods sold,,,,,x$,,,,],[$Gross profit,hemaxy:,,,,,,,,$]]$