Requirement 1: Date Account July 3 July 4 July 9 July 11 CD CITY Transaction Entries (Purchase inventory on account) (Pay freight-in) (Return inventory on account) (Pay on account less 1% discount) Debit Credit July 12 (Sell inventory on account) (Record cost of inventory sold) July 15 July 18 July 22 (Receive cash on account) (Purchase inventory on account) (Sell inventory for cash) (Record cost of inventory sold) July 28 July 30 (Return inventory on account) (Pay cash on account) Requirement 2: CD CITY Multiple-step Income Statement (partial) For the month of July Net sales Cost of goods sold Gross Profit + July 3 July 4 July 9 Return incorrectly ordered CDs CD CITY July Transactions Purchased CDs on account, terms 1/10,n/30 $ Pay freight charges on July 3 purchase 69 69 69 2,300 110 $ 200 July 11 Pay July 3 purchase in full ? July 12 Sell CDs on account Cost of CDs sold 55 $ 5,800 $ 3,000 July 15 Receive payment on CDs sold July 12 ? July 18 Purchased CDs on account, terms 1/10,n/30 $ July 22 Sell CDs for cash Cost of CDs sold $ July 28 Return CDs purchased July 18 $ EA EA EA CA 3,100 $ 4,200 2,500 300 July 30 Pay July 18 purchase in full ? Additional Information: Inventory at beginning of July 69 3,400 P6-3A 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 July 3 Purchase CDs on account from Wholesale Music for $2,300, terms 1/10, n/30. 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 July 15 July 18 July 22 Sell CDs to customers on account, $5,800, that had a cost of $3,000. Receive full payment from customers related to the sale on July 12. Purchase CDs on account from Music Supply for $3,100, terms 1/10, n/30. Sell CDs to customers for cash, $4,200, that had a cost of $2.500. July 28 Return Ce to Music Supply and receive credit of $300. 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