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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 2,000 units at a price of $9 cash per unit (for a total cost of $18,000).
May 5	Allied sold 1,000 of the units in inventory for $13 per unit (invoice total: $13,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $9,000.
May 7	Macy returns 100 units because they did not fit the customers needs (invoice amount: $1,300). Allied restores the units, which cost $900, to its inventory.
May 8	Macy discovers that 100 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 $500 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.

Use the above informations, analyze each transaction by indicating its effects on the income statementspecifically, identify the accounts and amounts (including + or ) for each transaction.

\begin{tabular}{|c|c|c|c|c|c|c|} \hline \multirow[b]{2}{*}{ Income Statement Components } & \multicolumn{2}{|c|}{ May 3} & \multicolumn{2}{|c|}{ May 5} & \multicolumn{2}{|c|}{ May 7} \\ \hline & \begin{tabular}{l} Increase or \\ Decrease \end{tabular} & Amount & \begin{tabular}{l} Increase or \\ Decrease \end{tabular} & Amount & \begin{tabular}{c} Increase or \\ Decrease \end{tabular} & Amount \\ \hline Sales & (+) increase & $18,000 & & & & \\ \hline Sales discounts & & & & & & \\ \hline Sales returns and allowances & & & & & & \\ \hline Net sales & & & & & & \\ \hline Cost of goods sold & & & & & & \\ \hline Gross profit & & & & & & \\ \hline \end{tabular}

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