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At the beginning of July, CD City has a balance in inventory of $2,750. The following transactions occur during the month of July. Purchase CDs on account from Wholesale Music for $1,650, terms 2/10, n/30. July 3 July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $110. July 9 Return incorrectly ordered CDs to Wholesale Music and receive credit, $200. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $4,500, that had a cost of $2,350. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,450, terms 2/10, n/30. July 22 Sell CDs to customers for cash, $3,550, that had a cost of $1,850. July 28 Return CDs to Music Supply and receive credit of $170. July 30 Pay Music Supply in full. Required: 1. Assuming that CD City uses a perpetual inventory system, record the transactions. 2. Prepare the top section of the multiple-step income statement through gross profit for the month of July. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the top section of the multiple-step income statement through gross profit for the month of July. CD CITY Multiple-Step Income Statement (partial) For the Month of July Net Sales Cost of Goods Sold Gross Profit (4,200)

At the beginning of July, CD City has a balance in inventory of $2,750. The following transactions occur during the month of July. Purchase CDs on account from Wholesale Music for $1,650, terms 2/10, n/30. July 3 July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $110. July 9 Return incorrectly ordered CDs to Wholesale Music and receive credit, $200. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $4,500, that had a cost of $2,350. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,450, terms 2/10, n/30. July 22 Sell CDs to customers for cash, $3,550, that had a cost of $1,850. July 28 Return CDs to Music Supply and receive credit of $170. July 30 Pay Music Supply in full. Required: 1. Assuming that CD City uses a perpetual inventory system, record the transactions. 2. Prepare the top section of the multiple-step income statement through gross profit for the month of July. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the top section of the multiple-step income statement through gross profit for the month of July. CD CITY Multiple-Step Income Statement (partial) For the Month of July Net Sales Cost of Goods Sold Gross Profit (4,200)

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter5: Accounting Systems
Section: Chapter Questions
Problem 14E: Guardian Services Inc. had the following transactions during the month of April: a. Record the June...
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At the beginning of July, CD City has a balance in inventory of $2,750. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $1,650, terms 2/10, n/30. July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $110. July 9 Return incorrectly ordered CDs to Wholesale Music and receive credit, $200. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $4,500, that had a cost of $2,350. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,450, terms 2/10, n/30. July 22 Sell CDs to customers for cash, $3,550, that had a cost of $1,850. July 28 Return CDs to Music Supply and receive credit of $170. July 30 Pay Music Supply in full. Required: 1. Assuming that CD City uses a perpetual inventory system, record the transactions. 2. Prepare the top section of the multiple-step income statement through gross profit for the month of July. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the top section of the multiple-step income statement through gross profit for the month of July. Gross Profit CD CITY Multiple-Step Income Statement (partial) For the Month of July Net Sales Cost of Goods Sold (4,200)
Transcribed Image Text:At the beginning of July, CD City has a balance in inventory of $2,750. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $1,650, terms 2/10, n/30. July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $110. July 9 Return incorrectly ordered CDs to Wholesale Music and receive credit, $200. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $4,500, that had a cost of $2,350. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,450, terms 2/10, n/30. July 22 Sell CDs to customers for cash, $3,550, that had a cost of $1,850. July 28 Return CDs to Music Supply and receive credit of $170. July 30 Pay Music Supply in full. Required: 1. Assuming that CD City uses a perpetual inventory system, record the transactions. 2. Prepare the top section of the multiple-step income statement through gross profit for the month of July. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the top section of the multiple-step income statement through gross profit for the month of July. Gross Profit CD CITY Multiple-Step Income Statement (partial) For the Month of July Net Sales Cost of Goods Sold (4,200)
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