At the beginning of July, CD City has a balance in inventory of $2,750. The following transactions occur during the mor 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.
At the beginning of July, CD City has a balance in inventory of $2,750. The following transactions occur during the mor 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:At the beginning of July, CD City has a balance in inventory of $2,750. The following transactions occur during the mon
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
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