P63A At the beginning of July, CD City has a balance in inventory of $3,400. The following transactions occur during the month of July.

July	3	Purchase CDs on account from Wholesale Music for $2,300, terms 1/10, 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, $5,800, that had a cost of $3,000.
July	15	Receive full payment from customers related to the sale on July 12.
July	18	Purchase CDs on account from Music Supply for $3,100, terms 1/10, n/30.
July	22	Sell CDs to customers for cash, $4,200, that had a cost of $2,500.
July	28	Return CDs to Music Supply and receive credit of $300.
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.