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Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of...

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Accounting

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 1,000 of the units in inventory for $14 per unit (invoice total: $14,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $10,000.
May 7 Macy returns 100 units because they did not fit the customers needs (invoice amount: $1,400). Allied restores the units, which cost $1,000, 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 $600 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

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