At the beginning of July, CD City has a balance in inventory of $2,800. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $1,700, terms 1/10, n/30. July 4 Pay freight charges related to the July 3 purchase from Wholesale Music, $100. 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, $4,600, that had a cost of $2,400. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,500, terms 1/10, n/30. July 22 Sell CDs to customers for cash, $3,600, that had a cost of $1,900. July 28 Return CDs to Music Supply and receive credit of $180. 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.