Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 3, Problem 48EB
To determine
Indicate whether the transactions result in the recognition of revenue or expenses.
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Luna Company accepted credit cards in payment for $7,100 of services performed during July Year 1. The credit card company charged
Luna a 1.50 percent service fee; it paid Luna as soon as it received the invoices.
Required
a. Prepare the general journal entry to record the service revenue.
b. Prepare the general journal entry for the collection of the receivable from the credit card company.
c. Based on this information alone, what is the amount of net income earned during the month of July?
Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
Prepare the general journal entry to record the service revenue. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field. Round your answers to nearest whole dollar.)
View transaction list
Journal entry worksheet
<
A
Record service revenue on credit card payment and credit card expenses.
Note: Enter debits before credits.
Transaction
1
General…
In providing accounting services to small businesses, you encounter the following situations.
1.
Grainger Corporation rings up cash sales and sales taxes separately on its cash register. On April 10, the register totals are pre-tax sales of sales $5,200 plus GST of $300 and PST of $400.
2.
Darby Corporation receives its annual property tax bill in the amount of $8,100 on May 31.
3.
(i) During the month of March, Neufeld Corporation’s employees earned gross salaries of $60,400. Withholdings deducted from employee earnings related to these salaries were $2,950 for CPP, $1,068 for EI, $7,780 for income taxes, and $370 for union dues. (ii) Neufeld’s payroll costs for the week were $2,950 for CPP and $1,495 for EI.
Prepare the journal entries to record the above transactions. (Round answers to 0 decimal places, e.g. 5,275.)
Sr no.
Account Titles and Explanation
Debit
Credit
1.
2.
3…
Following are some transactions and events of Business Solutions.
February 26 The company paid cash to Lyn Addie for eight days' work at $120 per day.
March 25 The company sold merchandise with a $2,100 cost for $3,300 on credit to Wildcat Services, invoice dated
March 25.
Required:
1. Assume that Lyn Addie is an unmarried employee. Her $960 of wages have deductions for FICA Social Security taxes, FICA
Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $96. Compute her net pay for the
eight days' work paid on February 26.
2. Record the journal entry to reflect the payroll payment to Lyn Addie as computed in part 1.
3. Record the journal entry to reflect the (employer) payroll tax expenses for the February 26 payroll payment. Assume Lyn Addie
has not met earnings limits for FUTA and SUTA (the FUTA rate is 0.6% and the SUTA rate is 5.4% for the company).
4. Record the entries for the merchandise sold on March 25 if a 4% sales tax rate applies.…
Chapter 3 Solutions
Financial Accounting
Ch. 3 - Prob. 1YTCh. 3 - Prob. 2YTCh. 3 - Prob. 3YTCh. 3 - Prob. 4YTCh. 3 - Prob. 5YTCh. 3 - Prob. 6YTCh. 3 - Prob. 7YTCh. 3 - How does accrual basis accounting differ from cash...Ch. 3 - Prob. 2QCh. 3 - Prob. 3Q
Ch. 3 - Prob. 4QCh. 3 - What are accrued expenses?Ch. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Name two common deferred expenses.Ch. 3 - What does it mean to recognize revenue?Ch. 3 - How does matching relate to accruals and...Ch. 3 - What is depreciation?Ch. 3 - Why is depreciation necessary?Ch. 3 - Prob. 13QCh. 3 - Prob. 14QCh. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - Prob. 8MCQCh. 3 - When prepaid insurance has been used, the...Ch. 3 - Prob. 10MCQCh. 3 - Prob. 1SEACh. 3 - Prob. 2SEACh. 3 - Account for interest expense. (LO 1, 2). UMC...Ch. 3 - Prob. 4SEACh. 3 - Account for insurance expense. (LO 1, 3). Catrina...Ch. 3 - Prob. 6SEACh. 3 - Account for unearned revenue. (LO 1, 3). Able...Ch. 3 - Prob. 8SEACh. 3 - Prob. 9SEACh. 3 - Prob. 10SEACh. 3 - Calculate profit margin on sales ratio. (LO 5)....Ch. 3 - Prob. 12SEBCh. 3 - Prob. 13SEBCh. 3 - Prob. 14SEBCh. 3 - Prob. 15SEBCh. 3 - Prob. 16SEBCh. 3 - Prob. 17SEBCh. 3 - Prob. 18SEBCh. 3 - Prob. 19SEBCh. 3 - Calculate net income. (LO I, 4). Suppose a company...Ch. 3 - Prob. 21SEBCh. 3 - Prob. 22SEBCh. 3 - Prob. 23EACh. 3 - Prob. 24EACh. 3 - Prob. 25EACh. 3 - Prob. 26EACh. 3 - Prob. 27EACh. 3 - Prob. 28EACh. 3 - Account for insurance expense. (LO 1, 3). Yodel ...Ch. 3 - Prob. 30EACh. 3 - Prob. 31EACh. 3 - Prob. 32EACh. 3 - Prob. 33EACh. 3 - Prob. 34EACh. 3 - Southeast Pest Control, Inc., was started when its...Ch. 3 - Prob. 36EACh. 3 - Prob. 37EACh. 3 - Prob. 38EACh. 3 - Prob. 39EACh. 3 - Prob. 40EBCh. 3 - Prob. 41EBCh. 3 - Prob. 42EBCh. 3 - TJs Tavern paid 10,800 on February 1, 2010, for a...Ch. 3 - Prob. 44EBCh. 3 - Prob. 45EBCh. 3 - Account for insurance expense. (LO 1, 3). All...Ch. 3 - Prob. 47EBCh. 3 - Prob. 48EBCh. 3 - Prob. 49EBCh. 3 - Prob. 50EBCh. 3 - Prob. 51EBCh. 3 - Prob. 52EBCh. 3 - From the following list of accounts (1) identify...Ch. 3 - Prob. 54EBCh. 3 - Prob. 55EBCh. 3 - Prob. 56EBCh. 3 - Prob. 57PACh. 3 - Prob. 58PACh. 3 - Prob. 59PACh. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 61PACh. 3 - Record adjustments. (LO 1, 2, 3). The Gladiator...Ch. 3 - Prob. 63PACh. 3 - Transactions for Pops Company for 2011 were as...Ch. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 66PACh. 3 - Prob. 67PACh. 3 - Record adjustments and prepare income statement....Ch. 3 - Prob. 69PBCh. 3 - Prob. 70PBCh. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 72PBCh. 3 - Record adjustments. (LO 1, 2, 3). Summit Climbing...Ch. 3 - Prob. 74PBCh. 3 - Prob. 75PBCh. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 77PBCh. 3 - Prob. 78PBCh. 3 - Identify and explain accruals and deferrals. (LO...Ch. 3 - Prob. 2FSACh. 3 - Prob. 3FSACh. 3 - Prob. 1CTPCh. 3 - Prob. 1IECh. 3 - Prob. 3IECh. 3 - Prob. 4IE
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- Following are some transactions and events of Business Solutions. February 26 The company paid cash to Lyn Addie for eight days' work at $140 per day. March 25 The company sold merchandise with a $2,500 cost for $3,100 on credit to Wildcat Services, invoice dated March 25. Required: 1. Assume that Lyn Addie is an unmarried employee. Her $1,120 of wages have deductions for FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $112. Compute her net pay for the eight days' work paid on February 26. 2. Record the journal entry to reflect the payroll payment to Lyn Addie as computed in part 1. 3. Record the journal entry to reflect the (employer) payroll tax expenses for the February 26 payroll payment. Assume Lyn Addie has not met earnings limits for FUTA and SUTA (the FUTA rate is 0.6% and the SUTA rate is 5.4% for the company). 4. Record the entries for the merchandise sold on March 25 if a 4% sales tax rate applies.…arrow_forwardFollowing are some transactions and events of Business Solutions. Feb. 26 The company paid cash to Lyn Addie for eight days' work at $130 per day. Mar. 25 The company sold merchandise with a $2,200 cost for $2,900 on credit to Wildcat Services, invoice dated March 25. Required:1. Assume that Lyn Addie is an unmarried employee. Her $1,040 of wages have deductions for FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $104. Compute her net pay for the eight days' work paid on February 26. (Round your answer to 2 decimal places. Do not round intermediate calculations.)2. Record the journal entry to reflect the payroll payment to Lyn Addie as computed in part 1. (Round your answers to 2 decimal places. Do not round intermediate calculations.)3. Record the journal entry to reflect the (employer) payroll tax expenses for the February 26 payroll payment. Assume Lyn Addie has not met earnings limits…arrow_forwardFollowing are some transactions and events of Business Solutions. February 26 The company paid cash to Lyn Addie for eight days' work at $140 per day. March 25 The company sold merchandise with a $2,300 cost for $3,500 on credit to Wildcat Services, invoice dated March 25. Required: 1. Assume that Lyn Addie is an unmarried employee. Her $1,120 of wages have deductions for FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $112. Compute her net pay for the eight days' work paid on February 26. 2. Record the journal entry to reflect the payroll payment to Lyn Addie as computed in part 1. 3. Record the journal entry to reflect the (employer) payroll tax expenses for the February 26 payroll payment. Assume Lyn Addie has not met earnings limits for FUTA and SUTA (the FUTA rate is 0.6% and the SUTA rate is 5.4% for the company). 4. Record the entries for the merchandise sold on March 25 if a 4% sales tax rate applies.…arrow_forward
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