[The following information applies to the questions displayed below.] 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.

5.

value: 7.69 points

Required information

Required:

1. Assuming that CD City uses a perpetual inventory system, record the transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

References

eBook & Resources

General JournalLearning Objective: 06-02 Understand how cost of goods sold is reported in a multiple-step income statement.

Difficulty: 3 HardLearning Objective: 06-05 Record inventory transactions using a perpetual inventory system.

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6.

value: 7.69 points

Required information

2. Prepare the top section of the multiple-step income statement through gross profit for the month of July.