At the beginning of July, CD City has a balance in inventory of $3,250. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $2,150, 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, $300. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $5,500, that had a cost of $2,850. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,950, terms 2/10, n/30. July 22 Sell CDs to customers for cash, $4,050, that had a cost of $2,350. July 28 Return CDs to Music Supply and receive credit of $270. 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 aross profit for the month of July.
At the beginning of July, CD City has a balance in inventory of $3,250. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $2,150, 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, $300. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $5,500, that had a cost of $2,850. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,950, terms 2/10, n/30. July 22 Sell CDs to customers for cash, $4,050, that had a cost of $2,350. July 28 Return CDs to Music Supply and receive credit of $270. 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 aross profit for the month of July.
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 $3,250. The following transactions occur during the month of July.
July 3 Purchase CDs on account from Wholesale Music for $2,150, 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, $300.
July 11 Pay Wholesale Music in full.
July 12 Sell CDs to customers on account, $5,500, that had a cost of $2,850.
July 15 Receive full payment from customers related to the sale on July 12.
July 18 Purchase CDs on account from Music Supply for $2,950, terms 2/10, n/30.
July 22 Sell CDs to customers for cash, $4,050, that had a cost of $2,350.
July 28 Return CDs to Music Supply and receive credit of $270.
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2399595e-82dd-4064-a8b0-fd09d255f39f%2F2fe26a5c-b21f-4820-988f-74241ebd1caf%2Fe4883u_processed.png&w=3840&q=75)
Transcribed Image Text:At the beginning of July, CD City has a balance in inventory of $3,250. The following transactions occur during the month of July.
July 3 Purchase CDs on account from Wholesale Music for $2,150, 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, $300.
July 11 Pay Wholesale Music in full.
July 12 Sell CDs to customers on account, $5,500, that had a cost of $2,850.
July 15 Receive full payment from customers related to the sale on July 12.
July 18 Purchase CDs on account from Music Supply for $2,950, terms 2/10, n/30.
July 22 Sell CDs to customers for cash, $4,050, that had a cost of $2,350.
July 28 Return CDs to Music Supply and receive credit of $270.
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.
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