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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 $$10$ cash per unit $($for a total cost of $$20,000).$May $5$Allied sold $1,500$ of the units in inventory for $$14$ per unit $($invoice total: $$21,000)$ to Macy Company under credit terms $2/10,$ n$/60.$ The goods cost Allied $$15,000.$May $7$Macy returns $125$ units because they did not fit the customers needs $($invoice amount: $$1,750).$ Allied restores the units, which cost $$1,250,$ to its inventory.May $8$Macy discovers that $200$ units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price reduction $($allowance$)$ and credits Macy's accounts receivable for $$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.Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method.

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 $$10$ cash per unit $($for a total cost of $$20,000).$

May $5$ Allied sold $1,500$ of the units in inventory for $$14$ per unit $($invoice total: $$21,000)$ to Macy Company under credit terms $\frac{2}{10},\frac{n}{60}.$ The goods cost Allied $$15,000.$

May $7$ Macy returns $125$ units because they did not fit the customer's needs $($invoice amount: $$1,750).$ Allied restores the units, which cost $$1,250,$ to its inventory.

May $8$ Macy discovers that $200$ 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 $4-6($Static$)$ Recording sales, sales returns, and sales allowances LO P$2$

Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method.

Journal entry worksheet

$1$

$2$

$3$

$4$

$5$

$6$

$7$

Allied made its first and only purchase of inventory for the period on May $3$ for $2,000$ units at a price of $$10$ cash per unit $($for a total cost of $$20,000).$

Note: Enter debits before cr$]$

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