She started with x boxes. Then she bought 7 more, so now she has x + 2. Then half of the boxes were destroyed. She now has (x + 7)/2. She has 22 boxes.
The amount $13.50 is how much money Janie needs to buy the CD. 3 ($3) is the amount she already has. x represents each chore she does, and $1.20 is the amount she receives for doing that chore.