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.

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.

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 4PA: The following transactions relate to Hawkins, Inc., an office store wholesaler, during June of this...

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