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Allied Parts was organized on May 1, 2013, and made its first purchase of merchandise on May 3. The purchase was for 1,800 units at a price of $7 per unit. On May 5, Allied Parts sold 1,080 of the units for $11 per unit to Baker Co. Terms of the sale were 2/10, n/60.
a.
On May 7, Baker returns 378 units because they did not fit the customer's needs. Allied Parts restores the units to its inventory.
b.
On May 8, Baker discovers that 90 units are damaged but are still of some use and, therefore, keeps the units. Allied Parts sends Baker a credit memorandum for $270 to compensate for the damage.
c.
On May 15, Baker discovers that 108 units are the wrong color. Baker keeps 65 of these units because Allied Parts sends a $128 credit memorandum to compensate. Baker returns the remaining 43 units to Allied Parts. Allied Parts restores the 43 returned units to its inventory.
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