Prepare the top section of multiple-step income statement

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Reference no: EM131521011

Question: At the beginning of June, Circuit Country has a balance in inventory of $2,500. The following transactions occur during the month of June. June 2 Purchase radios on account from Radio World for $2,200, terms 2/15, n/45. June 4 Pay freight charges related to the

June 2 purchase from Radio World, $300.

June 8 Return defective radios to Radio World and receive credit, $200.

June 10 Pay Radio World in full.

June 11 Sell radios to customers on account, $4,000, that had a cost of $2,700.

June 18 Receive payment on account from customers, $3,000.

June 20 Purchase radios on account from Sound Unlimited for $3,300, terms 3/10, n/30.

June 23 Sell radios to customers for cash, $4,800, that had a cost of $3,100.

June 26 Return damaged radios to Sound Unlimited and receive credit of $400.

June 28 Pay Sound Unlimited in full.

Required: 1. Assuming that Circuit Country uses a perpetual inventory system, record transactions using the following account titles: Cash, Accounts Receivable, Inventory, Accounts Payable, Sales, and Cost of Goods Sold.

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

Reference no: EM131521011

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