Answer:
Gross profit = $ 3950.
Explanation:
1.
July-3. Dr Merchandise Inventory 1750
Cr Accounts payable 1750
( To record purchase of inventory on account)
July-4. Dr Merchandise Inventory 120
Cr Cash 120
( To record payment of freight charges)
July-9 Dr Accounts payable 400
Cr Merchandise Inventory 400
( To record return of inventory)
July-11 Dr Accounts payable 1750
Cr Cash 1750
( To record payment from wholesale music in full)
July-12.a) Dr Cost of goods sold 2450
Cr Merchandise inventory 2450
b) Dr Account receivable 4700
Cr Sales revenue 4700
(To record sales of goods to a customer)
July-15. Dr Cash 4700
Cr Account receivable 4700
( To record receipt from sale of goods)
July-18 Dr Merchandise inventory 2550
Cr Accounts payable 2550
(To record purchase of inventory on account)
July-22.a) Dr Cost of goods sold 1950
Cr merchandise inventory 1950
Dr Account receivable 3650
Cr sales revenue 3650
(To record sales of goods on account)
July-28 Dr Accounts payable 190
Cr Merchandise inventory 190
(To record purchase return)
July-30. Dr Accounts payable 2550
Cr Cash 2550
(To record paid in full).
2. Income statement
Sales (4700+3650) = 8350
Less: Cost of goods sold (2450+1950) =(<u>4400</u>)
Gross profit 3950
