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At the beginning of July, CD City has a balance in inventory of $3,000. The following transactions occur during the month of J July 3 Purchase CDs on account from Wholesale Music for $1,900, terms 1/10, n/30. July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $120. July 9 Return incorrectly ordered CDs to Wholesale Music and receipt of credit, $400. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $5,000, that had a cost of $2,600. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,700, terms 1/10, n/30. July 22 Sell CDs to customers for cash, $3,800, that had a cost of $2,100. July 28 Return CDs to Music Supply and receive credit of $220. July 30 Pay Music Supply in full.

At the beginning of July, CD City has a balance in inventory of $3,000. The following transactions occur during the month of J July 3 Purchase CDs on account from Wholesale Music for $1,900, terms 1/10, n/30. July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $120. July 9 Return incorrectly ordered CDs to Wholesale Music and receipt of credit, $400. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $5,000, that had a cost of $2,600. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,700, terms 1/10, n/30. July 22 Sell CDs to customers for cash, $3,800, that had a cost of $2,100. July 28 Return CDs to Music Supply and receive credit of $220. July 30 Pay Music Supply in full.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the beginning of July, CD City has a balance in inventory of $3,000. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $1,900, terms 1/10, n/30. July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $120. July 9 Return incorrectly ordered CDs to Wholesale Music and receipt of credit, $400. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $5,000, that had a cost of $2,600. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,700, terms 1/10, n/30. July 22 Sell CDs to customers for cash, $3,800, that had a cost of $2,100. July 28 Return CDs to Music Supply and receive credit of $220. July 30 Pay Music Supply in full. Record the month-end adjusting entry to inventory, assuming that a final count reveals ending inventory with a cost of $2,385. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) No 1 Date July 31 Cost of goods sold: Sales Revenue Beginning inventory Cost of Goods Sold Gain Cost of goods available for sale Cost of goods sold General Journal < Required 1 Required 3 > Debit 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 2,385 Credit 385 2,000
Transcribed Image Text:At the beginning of July, CD City has a balance in inventory of $3,000. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $1,900, terms 1/10, n/30. July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $120. July 9 Return incorrectly ordered CDs to Wholesale Music and receipt of credit, $400. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $5,000, that had a cost of $2,600. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,700, terms 1/10, n/30. July 22 Sell CDs to customers for cash, $3,800, that had a cost of $2,100. July 28 Return CDs to Music Supply and receive credit of $220. July 30 Pay Music Supply in full. Record the month-end adjusting entry to inventory, assuming that a final count reveals ending inventory with a cost of $2,385. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) No 1 Date July 31 Cost of goods sold: Sales Revenue Beginning inventory Cost of Goods Sold Gain Cost of goods available for sale Cost of goods sold General Journal < Required 1 Required 3 > Debit 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 2,385 Credit 385 2,000
Assuming that CD City uses a periodic inventory system, record the transactions. (If no entry is required for a particular transaction, select "No Journal Entry Required" in the first account field.) General Journal No 1 2 3 4 5 6 7 8 9 10 11 12 Date July 03 July 04 July 09 July 11 July 12 July 12 July 15 July 18 July 22 July 22 July 28 July 30 Inventory Accounts Payable Inventory Cash Accounts Payable Inventory Accounts Payable Inventory Cash Accounts Receivable Sales Revenue Cost of Goods Sold Inventory Cash Accounts Receivable Inventory Accounts Payable Cash Sales Revenue Cost of Goods Sold Inventory Accounts Payable Inventory Accounts Payable Cash *● *** ›› XX ›› ** ›› ** • ** 33 Debit 1,900 120 400 1,500 5,000 2,600 5,000 2,700 3,800 2,100 220 2,580 x Credit 1,900 120 400 15 1,485 5,000 2,600 5,000 2,700 3,800 2,100 220 2,580 Activ Go to S
Transcribed Image Text:Assuming that CD City uses a periodic inventory system, record the transactions. (If no entry is required for a particular transaction, select "No Journal Entry Required" in the first account field.) General Journal No 1 2 3 4 5 6 7 8 9 10 11 12 Date July 03 July 04 July 09 July 11 July 12 July 12 July 15 July 18 July 22 July 22 July 28 July 30 Inventory Accounts Payable Inventory Cash Accounts Payable Inventory Accounts Payable Inventory Cash Accounts Receivable Sales Revenue Cost of Goods Sold Inventory Cash Accounts Receivable Inventory Accounts Payable Cash Sales Revenue Cost of Goods Sold Inventory Accounts Payable Inventory Accounts Payable Cash *● *** ›› XX ›› ** ›› ** • ** 33 Debit 1,900 120 400 1,500 5,000 2,600 5,000 2,700 3,800 2,100 220 2,580 x Credit 1,900 120 400 15 1,485 5,000 2,600 5,000 2,700 3,800 2,100 220 2,580 Activ Go to S
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