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\begin{tabular}{|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{ Income Statement Components } & \multicolumn{2}{|c|}{ May 3} & \multicolumn{2}{|c|}{ May 5} & \multicolumn{2}{|c|}{ May 7} \\ \hline & Increase/Decrease & Amount & Increase/Decrease & Amount & Increase/Decrease & Amount \\ \hline \multicolumn{7}{|l|}{ Sales } \\ \hline \multicolumn{7}{|l|}{ Sales discounts } \\ \hline \multicolumn{7}{|l|}{ Sales returns and allowances } \\ \hline \multicolumn{7}{|l|}{ Net sales } \\ \hline \multicolumn{7}{|l|}{ Cost of goods sold } \\ \hline Gross profit & & & & & & \\ \hline \end{tabular} Required information [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 3,000 units at a price of $11 cash per unit (for a total cost of $33,000 ). May 5 Allied sold 1,500 of the units in inventory for $15 per unit (invoice total: $22,500 ) to Macy Company under credit terms 2/10,n/60. The goods cost Allied $16,500. May 7 Macy returns 150 units because they did not fit the customer's needs (invoice amount: \$2,250). Allied restores the units, which cost $1,650, to its inventory. May 8 Macy discovers that 150 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 $1,050 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. \begin{tabular}{|c|c|c|c|c|} \hline 1 & May 03 & Merchandise inventory & 33,000 & \\ \hline & & Cash & & 33,000 \\ \hline \multirow[t]{2}{*}{2} & May 05 & Accounts receivable & 22,500 & \\ \hline & & Sales & & 22,500 \\ \hline \multirow[t]{2}{*}{3} & May 05 & Cost of goods sold & 16,500 & \\ \hline & & Merchandise inventory & & 16,500 \\ \hline \multirow[t]{2}{*}{4} & May 07 & Sales returns and allowances & 2,250 & \\ \hline & & Accounts receivable & & 2,250 \\ \hline \multirow[t]{2}{*}{5} & May 07 & Merchandise inventory & 1,650 & \\ \hline & & Cost of goods sold & & 1,650 \\ \hline \multirow[t]{2}{*}{6} & May 08 & Sales returns and allowances & 1,050 & \\ \hline & & Accounts receivable & & 1,050 \\ \hline \multirow[t]{3}{*}{7} & May 15 & Cash & 18,816 & \\ \hline & & Sales discounts & 384 & \\ \hline & & Accounts receivable & & 19,200 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{2}{|c|}{ May 8} & \multicolumn{2}{|c|}{ May 15} \\ \hline Increase/Decrease & Amount & Increase/Decrease & Amount \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline \end{tabular}

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