At the beginning of July, CD City has a balance in inventory of $2,550. The following transactions occur during the month of July. July 3 Purchase CDs on account from Wholesale Music for $1,450, 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, $400. July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $4,100, that had a cost of $2,150. July 15 Receive full payment from customers related to the sale on July 12. July 18 Purchase CDs on account from Music Supply for $2,250, terms 2/10, n/30. July 22 Sell CDs to customers for cash, $3,350, that had a cost of $1,650. July 28 Return CDs to Music Supply and receive credit of $130. 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.)

Inventory1450 debit

Accounts Payable  1450 crdit

--to record purchase--  

Inventory120 debit

Cash  120 credit

--to record payment of freights--  

Accounts Payable400 debit

Inventory  400 credit

--to record returned goods--

Accounts Payable1050 debit

Inventory  21 credit

Cash      1029 credit

--to record payment within discount--  

Accounts Receivables4100 debit

Sales Revenues  4100 credit

--to record sale--  

COGS  2150 debit

Inventory  2150 credit

--to record COGS of the previous sale--    

Cash  4,100

Accounts Receivables  4100

--to record collection--

Explanation:

For the purchase we must adjust teh invoice nominal as we are paying within the discount windows and also, there was returned goods.

Balance of the account payable:

1450  -  400 return = 1050

Then 2% discount: 1,050 x 0.02 = 21

Cash payement: 1,050 - 21 = 1,029

The sale do not have credit terms for discount neither a return thus, we don't have to make any adjustment to the invoice nominal the customer pay that amount.

The record of transaction is attached in the file below

Explanation:

lives by a moral and ethical code