Question

Journalize the entries for the following transactions. Refer to the Chart of Accounts for exact wording of account titles. (Note: The company uses a clearinghouse to take care of all bank as well as non-bank credit cards used by its customers. ) Mar. 1 Sold merchandise for cash, $116,300. The cost of the merchandise sold was $72,000. 10 Sold merchandise on account, $755,000. The cost of the merchandise sold was $400,000. 12 Sold merchandise to customers who used MasterCard and VISA, $1,950,000. The cost of the merchandise sold was $1,250,000. 17 Sold merchandise to customers who used American Express, $330,000. The cost of the merchandise sold was $230,000. 31 Paid $81,500 to National Clearing House Credit Co. for service fees for processing MasterCard, VISA, and American Express sales.

Answer 1

Answer:

cash       116,300 debit

    sales revenues          116,300 credit

-- to record sales in cash --

Cost of Goods Sold 72,000 debit

              Inventory                72,000 credit

-- COGS for the previous sales--

account receivable  755,000 debit

        sales revenues            755,000 credit

-- to record sales in cash --

Cost of Goods Sold    400,000 debit

              Inventory               400,000 credit

-- COGS for the previous sales--

account receivable  1,950,000 debit

        sales revenues            1,950,000 credit

-- to record sales in cash --

Cost of Goods Sold    1,250,000 debit

              Inventory               1,250,000 credit

-- COGS for the previous sales--

account receivable  330,000 debit

        sales revenues            330,000 credit

-- to record sales in cash --

Cost of Goods Sold    230,000 debit

              Inventory               230,000 credit

-- COGS for the previous sales--

Credit card expense 81,500 debit

         Cash                                 81,500 credit

--to record payment of fees to credit car--

Explanation:

We will recognize the sales revenue for the sales when they occur.

If was on cash we use cash else, account receivable

Then, we will decrease our inventory by the cost of the goods sold and declare this expense.

Finally, the fees will be considered an expense relatesd to the use of credit card.