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Problem 6-3A Record transactions and prepare a partial income statement using a perpetual inventory system (LO6-2, 6-5)

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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.

Problem 6-3A Part 1

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.)

Problem 6-3A Part 2

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

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