Retailers that accept credit cards pay a “swipe fee” to credit-card issuers such as Visa and Mastercard ranging from 1 to 3 percent of the purchase. The credit-card companies prohibited retailers from passing that fee on to consumers, but a recent lawsuit settlement proposal lifted that restriction. Under the settlement, retailers can charge 2.5 to 3 percent on each transaction. Discuss this issue and develop a report on the pros and cons of retailers adding a surcharge to credit purchases. (AACSB: Written and Oral Communication; Reflective Thinking)
Q: Samba Corporation operates in an industry with high collectability issues. Recently, one of Samba's…
A: The bank reconciliation statement is prepared to adjust the cash and bank balance to make them…
Q: As the accountant for Pure-Air Distributing, you attend a sales managers’ meeting devoted to a…
A: The amount reported in the income statement account Bad Debts Expense pertains to the estimated…
Q: On June 1,2024, Puritan Performance Cell Phones sold $23,000 of merchandise to Avery Trucking…
A: Direct Write off Method - Under direct write off method uncollectible accounts directly write off as…
Q: Calculate the APR and rEAR of non-free credit asscoiated with credit terms of 3/10 net 50, and…
A: Given: Given:
Q: On September 30, 2019, Rolen Machinery Co. sold a machine and accepted the customer’s…
A: Rolen should account for the effects of the note of being dishonored is following manner:- Rolen…
Q: Carla Vista Garage Co. accepts the following forms of payment: Visa, MasterCard, the Carla Vista…
A: Journal entries recording is the initial step of accounting cycle process, under which atleast one…
Q: Mystic Magic issued a $120,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for…
A: 1. 01-Jan-18 Notes Receivable... Dr 120,000 To accounts receivable…
Q: Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2021. The note,…
A: Notes receivables are a part of asset which are issued by the corporation for a limited time period…
Q: As the accountant for Clean Air Controls, you attend a meeting with the sales managers to discuss…
A: Accounts Receivables - Accounts Receivables are the amount unpaid by the customer for the service…
Q: You and your spouse have separate charge accounts at a local department store. When you tried to use…
A:
Q: Mystic Magic issued a $130,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: ystic Magic issued a $120,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for…
A: A journal entry is a form of accounting entry that is used to document a financial transaction in a…
Q: Crane Company provides for doubtful accounts based on 4.5% of credit sales. The following data are…
A: working notes: 1. ($3,190,000x 4.5%) =$1,43,550
Q: On July 1, 2020, Erik Santos Company sold special order merchandise on credit and received in return…
A: a. Interest on a promissory note to be recognized once it's attained. The urban center should…
Q: Discount Mart utilizes the allowance method of accounting for uncollectible receivables. On December…
A: Calculate the Allowance for doubtful debt as follows: Allowance for doubtful debt = accounts…
Q: what is the percentage cost of trade credit to customers who do not take the discount and pay in 40…
A: 1) Therefore, the percentage of cost of trade credit to customers are 37.62%
Q: Easter Supply sells a variety of merchandise to retail stores on account, but it insists that any…
A:
Q: When a customer is delinquent on paying a notes receivable, your company has the option to continue…
A: Here in the questions, there are multiple sub-parts so we are doing the first three sub-parts If…
Q: Yolo Corporation experienced financial difficulty in 2020. It decided to go into note receivable…
A: Journal Entries- Journal entries are the visual representation of business transactions. A general…
Q: Mystic Magic issued a $170,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for…
A: please find the attached image
Q: adiant Company sells a variety of imported goods. By selling on credit, Radiant cannot expect to…
A: Accounts receivable is the amount owed by debtors on account of goods sold on credit. Bad debt…
Q: Lonely Company accepted a P 200,000, 90-day, 12% interest bearing note dated November 15, 2021 from…
A: Note receivable agreement is more formal than an account receivable agreement. Here, Lonely company…
Q: Retailers that accept credit cards pay a “swipe fee” to credit-card issuers such as Visa and…
A: Surcharge is defined as the extra or additional charge or tax which is added to the cost of the…
Q: lton John, a friend of yours, overheard a discussion at work about changes his employer wants to…
A: Accounts uncollectible are receivables, advances, or different obligations or debts that have…
Q: Kingbird & Co.reported the following information in its general ledger for the year ended November…
A: Accounts receivables are those accounts or customers to whom business has made credit sales on…
Q: "We have a contract with our partner bank that they pay us a monthly rebate that is calculated as a…
A: Cash Back Rewards- Cash back reward Incentive is used by the banks where the percentage of the…
Q: On September 30, 2019, Rolen Machinery Co. sold a machine and accepted the customer’s…
A: SOLUTION- (A) 1- SALE PRICE OF MACHINE- AS PER THE ACCOUNTING STANDARD , IF THE SALE VALUE IS NOT…
Q: If a company accepts credit cards, they must record the expense on their books. Please prepare the…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: Ivanhoe Company provides for doubtful accounts based on 4.0% of credit sales. The following data are…
A: Estimated uncollectible accounts = Credit sales during 2020 x 4% = $3,020,000 x 4% = $120,800
Q: Country Store, Inc. provides credit to their favorite customers. On December 31, 2018, the…
A: Allowances For Doubtful Debts:-Receivables which are not going to receive in the future, the company…
Q: Which of the following is not an example of control procedures over accounts receivable?…
A: Option A is the answer Analysis B) Sending monthly statements to customer who take a credit: Where…
Q: Ingrid Inc. has strict credit policies and only extends credit to customers with outstanding credit…
A: 1) Balance in accounts receivable on December 31, 2018, prior to the adjustment = = opening balance…
Q: Under the Consumer Credit Protection Act, the maximum amount that you must pay if someone uses your…
A: Credit card companies charge the customers if they do not report illegal use of their credit cards.…
Q: Health Corporation has several current notes receivable on its year-end balance sheet. While…
A: Notes receivable are balance sheet items that record the value of promissory notes that a company…
Q: Country Store, Inc. provides credit to their favorite customers. On December 31, 2018, the…
A: Accounts receivable: It is a current asset of an organization. It is the amount due from customers…
Q: Which of the following practices by a credit card company results in lower interest charges to the…
A: Credit card: Credit card is a card issued to customers for making payment toward goods and…
Q: Mystic Magic issued a $140,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for…
A: The journal entries are prepared to record daily transactions of the business.
Q: Marydale Products permits its customers to defer payment by giving personal notes instead of cash.…
A: Journal is a place where accounting transactions are listed in the book keeping system before ledger…
Q: Which of the following is true of a petty cash voucher? a.It must be issued once in a month by a…
A: petty cash is used to provide sufficient funds to meet the minor expenditure of business.
Q: Amazon company has accounts receivable totaling $850,000 and an Allowance for doubtful Accounts…
A: Businesses mainly sell there goods by cash or credit. The goods sold on credit customers have some…
Q: Rain T-Shirts issued a $440,600 note on January 1, 2018 to a customer, Larry Potts, in exchange for…
A: Journal entry is the entry made in Journal books; it is also called books of Original entry. Both…
Q: Grouper Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The…
A: 1. Net Method - Under the net method of recording accounts receivables when a company makes sales,…
Q: What is the amount of net accounts receivable before and after the write-off?
A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short…
Q: It is typically beneficial for companies to take advantage of early-payment discounts allowed on…
A: Opportunity for not taking the discount = Discount %/ (1 - Discount %) x (360/(Normal credit…
Q: Credit card companies may charge which of the following? (select all that apply) cash advance fee…
A: While Credit Card are an incredible resource, they frequently accompany various expenses that can…
Q: Mystic Magic issued a $140,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for…
A:
Q: Riverbed Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The…
A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…
Q: On December 31, 2010, Chelsea Co. provides a service for its customer Villas Boas Co. inexchange for…
A: First step is to compute the amount of liability of Note payable to be recorded o Dec31, 2010.This…
Q: "We have a contract with our partner bank that they pay us a monthly rebate that is calculated as a…
A: Interchange fees- These are the fees that are issued by the 'card issuing bank' for each of the…
Retailers that accept credit cards pay a “swipe fee” to credit-card issuers such as Visa and Mastercard ranging from 1 to 3 percent of the purchase. The credit-card companies prohibited retailers from passing that fee on to consumers, but a recent lawsuit settlement proposal lifted that restriction. Under the settlement, retailers can charge 2.5 to 3 percent on each transaction. Discuss this issue and develop a report on the pros and cons of retailers adding a surcharge to credit purchases. (AACSB: Written and Oral Communication; Reflective Thinking) |
Step by step
Solved in 2 steps
- Retailers that accept credit cards pay a “swipe fee” to credit-card issuers such as Visa and Mastercard ranging from 1 to 3 percent of the purchase. The credit-card companies prohibited retailers from passing that fee on to consumers, but a recent lawsuit settlement proposal lifted that restriction. Under the settlement, retailerscan charge 2.5 to 3 percent on each transaction. Discuss this issue and develop a report on the pros and cons of retailers adding a surcharge to credit purchases.Layaway plans allow you, for a fee, to pay for an item over a period of time and then receive the item when you finish paying for it. In November 2011, Senator Charles E. Schumer of New York warned that the holiday layaway programs recently reinstated by several popular retailers were, when you took the fees into account, charging interest at a rate significantly higher than the highest credit card rates.† Suppose that you bought a $66 item on November 15 on layaway, with the final payment due December 15, and that the retailer charged you a $5 service feeWhen a customer is delinquent on paying a notes receivable, your company has the option to continue to attempt collection or sell the debt to a collection agency. Research the benefits and challenges with each of these options and in a short essay, answer the following questions. A. What are the benefits and challenges of continuing to attempt collection yourself? B. What are the benefits and challenges of selling debt to a collection agency? C. If you had a dishonored notes receivable, which option would you select and why? D. Would you weight certain benefits or challenges differently when making your selection? How?
- Manufacturers, distributors, wholesalers, and retailers usually sell goods on credit rather than for cash. An invoice for the goods is sent, and the seller specifies payment terms on the invoice. These payment terms indicate when the invoice amount is due for payment and how much is to be paid. The business selling the goods can offer a cash discount to encourage prompt payment. This discount reduces the amount to be paid, and is based on the original amount of the invoice, the discount rate, and the timing of the payment or payments. Question: Discuss the above statement by answering the following: Elucidate the importance of discount for buyers and sellers. Specify the type of discount debated in the statement and the required conditions to be applied.Manufacturers, distributors, wholesalers, and retailers usually sell goods on credit rather than for cash. An invoice for the goods is sent, and the seller specifies payment terms on the invoice. These payment terms indicate when the invoice amount is due for payment and how much is to be paid. The business selling the goods can offer a cash discount to encourage prompt payment. This discount reduces the amount to be paid, and is based on the original amount of the invoice, the discount rate, and the timing of the payment or payments. Question: Discuss the above statement by answering the following: 2- Specify the type of discount debated in the statement and the required conditions to be applied.Manufacturers, distributors, wholesalers, and retailers usually sell goods on credit rather than for cash. An invoice for the goods is sent, and the seller specifies payment terms on the invoice. These payment terms indicate when the invoice amount is due for payment and how much is to be paid. The business selling the goods can offer a cash discount to encourage prompt payment. This discount reduces the amount to be paid, and is based on the original amount of the invoice, the discount rate, and the timing of the payment or payments. Question: Discuss the above statement by answering the following: 1- Elucidate the importance of discount for buyers and sellers.
- BayFish Company currently uses maximum trade credit by not taking discounts on its purchases. Company is planning to borrow from its bank, using notes payable, in order to take trade discounts. The firm wants to determine the effect of this policy change on its net income. The standard industry credit terms offered by all its suppliers are 2/15, net 40 days, and BayFish pays in 40 days. Its net purchases are $10,000 per day, using a 365-day year. The interest rate on the notes payable is 8% percent and the firm’s tax rate is 40 percent. If the firm implements the plan, what is the expected change in BayFish’s net income? (Hint: Use Incremental approach table)If a company accepts credit cards, they must record the expense on their books. Please prepare the journal entries for the following scenario: Company A sells $480,000 on credit card sales. The credit card charges a 4.5% fee for the use of the card. The card company also deposits the cash into the company’s bank account the same night as the credit cards are accepted.Supply Club, Inc., sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2021 it started a loyalty program through which qualifying customers can accumulate points and redeem those points for discounts on future purchases. Redemption of a loyalty point reduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers do not earn additional loyalty points for purchases on which loyalty points are redeemed. Based on past experience, Supply Club estimates a 80% probability that any point issued will be redeemed for the discount. During July 2021, the company records $136,000 of revenue and awards 150,000 loyalty points. The aggregate stand-alone selling price of the purchased products is $136,000. Seventy-five percent of sales were cash sales, and the remainder were credit sales. Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers…
- Springer Products wishes to borrow $90,000 from a local bank using its accounts receivable to secure the loan. The bank's policy is to accept as collateral any accounts that are normally paid within 30 days of the end of the credit period, as long as the average age of the account is not greater than the customer's average payment period. Springer's accounts receivable, their average ages, and the average payment period for each customer are shown in the following table: Customer Accounts Receivable Average age of account Average payment period of customer A $11,000 42 days 50 days B $25,000 70 days 65 days C $10,000 48 days 45 days D $28,000 55 days 50 days E $14,000 50 days 60 days F $19,000 21 days 35 days G $30,000 10 days 30 days H $16,000 25 days 40 days…When a customer is delinquent on paying a notes receivable, your company has the option to continue to attempt collection or sell the debt to a collection agency. Research the benefits and challenges with each of these options and in a short essay, answer the following questions. Required part B What are the benefits and challenges of continuing to attempt collection yourself? What are the benefits and challenges of selling debt to a collection agency? If you had a dishonored notes receivable, which option would you select and why? Would you weight certain benefits or challenges differently when making your selection? How?Carla Vista Garage Co. accepts the following forms of payment: Visa, MasterCard, the Carla Vista Garage Co. credit card, and debit. Carla Vista is charged 3.50% for all bank credit card transactions and $0.50 per transaction for all debit card transactions. Carla Vista charges 14.25% interest on balances owing on the Carla Vista Garage Co. credit card. In October and November 2021, the following summary transactions occurred (note: there is no right of return for the sale of services; therefore, a refund liability entry is not necessary in this question): Oct. 15 20 30 31 Nov. 15 Record the above transactions for Carla Vista Garage Co. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 0 decimal places, e.g. 2,275. Record journal entries in the order presented in the problem.) to 0 decimal places, eg. 2,275. Record journal…