At the beginning of July, CD City has a balance in inventory of $ The following transactions occur during the month of July.
July Purchase CDs on account from Wholesale Music for $ terms n
July Pay cash for freight charges related to the July purchase from Wholesale Music, $
July Return incorrectly ordered CDs to Wholesale Music and receipt of credit, $
July Pay Wholesale Music in full.
July Sell CDs to customers on account, $ that had a cost of $
July Receive full payment from customers related to the sale on July
July Purchase CDs on account from Music Supply for $ terms n
July Sell CDs to customers for cash, $ that had a cost of $
July Return CDs to Music Supply and receive credit of $
July Pay Music Supply in full.
Required:
Assuming that CD City uses a periodic inventory system, record the transactions.
Record the monthend adjusting entry to inventory, assuming that a final count reveals ending inventory with a cost of $
Prepare the top section of the multiplestep income statement through gross profit for the month of July.
