Problem
Required Information
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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 $12 cash per unit (for a total cost of $24,000).
May 5 Allied sold 1,000 of the units in inventory for $16 per unit (invoice total: $16,060) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $12,000.
May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: $1,600). Allied restores the units, which cost $1, 200, 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 $800 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.
Task
Prepare the appropriate journal entries for Macy Company to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system; it purchases these units for resale.