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Required information [The following information applies to the questions displayed below.] Allied Merchandisers was organized on May 1. Macy Co. 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 $9 cash per unit (for a total cost of $27,000). 5 Allied sold 1,500 of the units in inventory for $13 per unit (invoice total: $19,500) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $13,500. 7 Macy returns 150 units because they did not fit the customer's needs (invoice amount: $1,950). Allied restores the units, which cost $1,350, to its inventory. 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 $750 to compensate for the damage. 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. No General Journal Credit Date May 03 Debit 27,000 Merchandise inventory Cash 27,000 May 05 19,500 Accounts receivable Sales 19,500 May 05 13,500 Cost of goods sold Merchandise inventory 13,500 May 07 1,950 Sales returns and allowances Accounts receivable 1,950 May 07 1,350 Merchandise inventory Cost of goods sold 1,350 May 08 750 Sales returns and allowances Accounts receivable 750 May 15 Cash Sales discounts Accounts receivable 17,400 X

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