Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Question
Chapter 5, Problem 52BE
To determine
Credit Cards:
The credit cards are the form of factors that collects money instantly in an electronic mode. Credit cards are a type of cards issued by the banks to the customers for paying to seller instantly and securely.
To calculate:
The
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Credit Card Sales
Jamie’s Fabrics accepts cash, personal checks, and two credit cards when customers buy merchandise. With the Great American Bank Card, Jamie’s Fabrics receives an immediate deposit in its checking account when credit card sales slips are deposited at the bank. The bank charges a three percent fee. With the United Merchants Card, Jamie’s Fabrics mails the credit card sales slips to United Merchants’ regional processing center each day. United Merchants accumulates these slips for two days and then mails a check to Jamie’s Fabrics, after deducting a three percent fee. Prepare journal entries to record the following:
Round to the nearest dollar.
a.
Sales for March 15 were as follows:
Cash and checks
$950
Great American Bank Card (Deposited at the end of the day)
1,200
United Merchants Card (Mailed at the end of the day)
700
$2,850
b.
Received a check for $1,900 from United Merchants on March 20.
a.
General Journal
Date
Description…
Accounting for Credit Card Sales
Frank's Tattoos and Body Piercing operates near campus. At the end of a recent day, Frank's cash register included credit card documents for the following sales amounts:
Mastercard
$756
Visa
486
The merchant's charges are 1.8% for Mastercard and 2.1% for Visa. Frank's also had cash sales of $375 and $800 of sales on credit to a local business.
Required:
Prepare the journal entry to record these sales.
K
Davis Woodworking accepts credit cards at its store. Davis' credit card processor charges a fee of 3% of the total amount of any credit sale. Assume that Reese Bird
purchases $10,500 of custom furniture and pays with a VISA card. Make the entry that Davis would make to record the sale to Bird. (You do not need to make the cost of
goods sold entry in this exercise.) (Record debits first, then credits. Exclude explanations from any journal entries. Assume that since this is a custom order, no refunds or
returns are allowed.)
Date
Journal Entry
Accounts
Debit
Credit
7
cree
0
For
Chapter 5 Solutions
Cornerstones of Financial Accounting
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