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Required information Use the following information for the Exercises below. [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 2,000 units at a price of $8cash per unit (for a total cost of $16,000 ). May 5 Allied sold 1,000 of the units in inventory for $12 per unit (invoice total: $12,000 ) to Macy Company under credit terms 2/10,n/60. The goods cost Allied $8,000. May 7 Macy returns 100 units because they did not fit the customer's needs (invoice amount: \$1,200). Allied restores the units, which cost $800, 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 $400 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 (Algo) Recording sales, sales returns, and sales allowances LO P2 Drepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross nethod. \begin{tabular}{|l|r|r|} \hline \multicolumn{2}{|c|}{ Income Statement } & \\ \hline Cash & & \\ \hline & & \\ \hline & & 0 \\ \hline & & \\ \hline Expenses & & \\ \hline Selling expenses & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total selling expenses & & \\ \hline General and administrative expenses & & \\ \hline & & \\ \hline Total general and administrative expenses & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} Additional Information: a. Store supplies still available at fiscal year-end amount to $2,400. b. Expired insurance, an administrative expense, is $1,650 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,550 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,400 of inventory is still available at fiscal year-end. Problem 4-5A (Algo) Parts 1, 2 and 3 equired: 1. Using the above information, prepare adjusting journal entries. 2. Prepare a multiple-step income statement for the year ended January 31 that begins with gross sales and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. 3. Prepare a single-step income statement for the year ended January 31