Answered

Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system).

1.Sold $29,000 of merchandise, which cost $22,200, on Mastercard credit cards. Mastercard charges a 5% fee.
2.Sold $5,900 of merchandise, which cost $3,450, on an assortment of bank credit cards. These cards charge a 4% fee.

Answer :

TomShelby

Answer:

Cash              27,550 debit

credit card fee 1,450 debit

               A/R              29,000 credit

--to record sales for Mastercard--

COGS   22,200 debit

   Inventory       22,200 credit

--to record cost of good sold for the previous sale--

Cash              5,664 debit

credit card fee 236 debit

               A/R              5,900 credit

--to record sales for Mastercard--

COGS   3,450 debit

   Inventory       3,450 credit

--to record cost of good sold for the previous sale--

Explanation:

The credit card charges a fee and provides cash for the firm. It removes the effort to collect from the customer.

master card fee and net proceeds:

29,000 x 5% = 1,450

net: 29,000 - 1,450  = 27,550

bank credit card fee and net proceeds:

5,900 x 4% = 236

net 5,900 - 236 = 5,664

abiolataiwo2015

The journal entries for the credit card sales transactions are: Debit Cash              27,550; Debit credit Card fee 1,450; Debit Account receivable   29,000.

Journal entries

1. Debit Cash            27,550

(29,000 - 1,450)

Debit credit Card fee 1,450

(29,000 x 5%)

Credit Account receivable 29,000

Debit Cost of goods sold  22,200

Credit Inventory       22,200

2. Debit Cash              5,664

(5,900 - 236)

Debit Credit card fee 236

(5,900 x 4%)

Credit Account receivable    5,900

Debit Cost of goods sold   3,450

Credit Inventory      3,450

Therefore, the journal entries for the credit card sales transactions are: Debit Cash 27,550; Debit credit Card fee 1,450; Debit Account receivable 29,000.

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