Question

QS 7-1 Credit card sales LO C1 Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system). Sold $33,000 of merchandise, which cost $25,400, on Mastercard credit cards. Mastercard charges a 5% fee. Sold $6,300 of merchandise, which cost $3,650, on an assortment of bank credit cards. These cards charge a 4% fee.

Answer 1

Answer:

1a. Dr Cash $31,350

Dr Cash expense $1,650

Cr sales $33,000

1b. Dr Cost of goods sold $25,400

Cr Merchandize inventory$25,400

2a. Dr Cash $6,048

Dr Cash expense $252

Cr Sales $6,300

2b. Dr Cost of goods sold $3,650

Cr Merchandize inventory$3,650

Explanation:

Preparation of the journal entries for the credit card sales transactions using the perpetual inventory system

1a. Dr Cash $31,350

($33,000-$1,650)

Dr Cash expense $1,650

($33,000 × 5% = $1,650)

Cr Sales $33,000

1b. Dr Cost of goods sold $25,400

Cr Merchandize inventory$25,400

2a. Dr Cash $6,048

(6300-252)

Dr Cash expense $252

($6,300 × 4% = $252)

Cr sales $6,300

2b. Dr Cost of goods sold $3,650

Cr Merchandize inventory$3,650