Question

Required information The following information applies to the questions displayed below.) At the beginning of July, CD City has a balance in inventory of $2,600. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $1,500, terme 1/10, n/30. July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Musie, $110. July 9 Return incorrectly ordered CDs to Wholesale Music and receive credit, $200. July 11 Pay Wholesale Music in full. July 12 Sell CDe to customers on account, $4,200, that had a cost of $2,200, July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,300, terms 1/10, n/30. July 22 Sell CDs to customers for cash, $3,400, that had a cost of $1,700. July 28 Return CDs to Music Supply and receive credit of $140. July 30 Pay Music Supply in full. 2. Prepare the top section of the multiple-step income statement through gross profit for the month of July. CD CITY Multiple-step Income Statement (partial) For the month of July

Answer 1

Particular		Amount
Sales Revenue		7600
Other Income (Discount Received)		13
Less: Cost of Good Sold
Opening Stock	2600
Purchases for the month	3460
Less: Closing Stock	2160	3900
Freight paid		110
Gross Profit		3603