In: Accounting
July | 3 | Purchase CDs on account from Wholesale Music for $2,050, terms 2/10, n/30. | ||
July | 4 | Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $120. | ||
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, $5,300, that had a cost of $2,750. | ||
July | 15 | Receive full payment from customers related to the sale on July 12. | ||
July | 18 | Purchase CDs on account from Music Supply for $2,850, terms 2/10, n/30. | ||
July | 22 | Sell CDs to customers for cash, $3,950, that had a cost of $2,250. | ||
July | 28 | Return CDs to Music Supply and receive credit of $250. | ||
July | 30 | Pay Music Supply in full. |
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.) ONLY need for JULY 11st.
2. Prepare the top section of the multiple-step income statement through gross profit for the month of July.
1.
Date | Account titles | Debit | Credit | |
Jul-03 | Inventory | $ 2,050 | ||
Accounts Payable | $ 2,050 | |||
(Purchased inventory on account) | ||||
Jul-04 | Inventory | $ 120 | ||
Cash | $ 120 | |||
(Paid freight on purchase of inventory) | ||||
Jul-09 | Accounts Payable | $ 200 | ||
Inventory | $ 200 | |||
(Return of incorrectly ordered inventory) | ||||
Jul-11 | Accounts Payable | $ 1,850 | =2050-200 | |
Cash | $ 1,813 | =1850*98% | ||
Inventory | $ 37 | =1850*2% | ||
(Paid cash net of discount) | ||||
Jul-12 | Accounts Receivable | $ 5,300 | ||
Sales Revenue | $ 5,300 | |||
(Sales of units on account) | ||||
Cost of Goods Sold | $ 2,750 | |||
Inventory | $ 2,750 | |||
(Cost taken out of inventory for sales) | ||||
Jul-15 | Cash | $ 5,300 | ||
Accounts Receivable | $ 5,300 | |||
(Received cash) | ||||
Jul-18 | Inventory | $ 2,850 | ||
Accounts Payable | $ 2,850 | |||
(Purchased inventory on account) | ||||
Jul-22 | Cash | $ 3,950 | ||
Sales Revenue | $ 3,950 | |||
(Sales of units for cash) | ||||
Cost of Goods Sold | $ 2,250 | |||
Inventory | $ 2,250 | |||
(Cost taken out of inventory for sales) | ||||
Jul-28 | Accounts Payable | $ 250 | ||
Inventory | $ 250 | |||
(Return of incorrectly ordered inventory) | ||||
Jul-30 | Accounts Payable | $ 2,600 | =2850-250 | |
Cash | $ 2,548 | =2600*98% | ||
Inventory | $ 52 | =2600*2% | ||
(Paid cash net of discount) |
2.
Income Statement | ||
Sales Revenue | $ 9,250 | =5300+3950 |
Less Cost of Goods Sold | $ 5,000 | =2750+2250 |
Gross Profit | $ 4,250 |