[The following information applies to the questions displayedbelow.]
Allied Merchandisers was organized on May 1. Macy Co. is a majorcustomer (buyer) of Allied (seller) products.
| May | | 3 | | Allied made its first and only purchase of inventory for theperiod on May 3 for 2,000 units at a price of $7 cash per unit (fora total cost of $14,000). |
| | 5 | | Allied sold 1,000 of the units in inventory for $11 per unit(invoice total: $11,000) to Macy Co. under credit terms 2/10, n/60.The goods cost Allied $7,000. |
| | 7 | | Macy returns 100 units because they did not fit the customer’sneeds (invoice amount: $1,100). Allied restores the units, whichcost $700, to its inventory. |
| | 8 | | Macy discovers that 100 units are scuffed but are still of useand, therefore, keeps the units. Allied sends Macy a creditmemorandum for $300 toward the original invoice amount tocompensate for the damage. |
| | 15 | | Allied receives payment from Macy for the amount owed on theMay 5 purchase; payment is net of returns, allowances, and any cashdiscount. |
Prepare the appropriate journal entries for Macy Co. to recordeach of the May transactions. Macy is a retailer that uses thegross method and a perpetual inventory system, and purchases theseunits for resale. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)
