Please fill in the general ledger. Every spot that is blue needs to be filled in. Thank you. **Educational Content: Understanding Credit Terms and Financing in Business**Kate has invested significant time and effort in streamlining the process of designing and producing greeting cards. She has documented the entire process in a QuickTime video she shared on her iMac. The video details a step-by-step process of using hardware and software to design and produce the cards. Although Kate meets many people eager to enter the greeting card business, they are often overwhelmed by the comprehensive process. In response, Kate has decided to sell the entire package, including hardware, software, and a video tutorial, for $4,500, with a plan to increase the price by $500 and sell it for $5,000.John Stevens, an individual Kate met at a greeting card conference, is interested in purchasing the package. However, John cannot pay in cash and instead desires credit from Kate. Kate understands that some of her potential customers may also prefer credit over cash payments. To accommodate such needs, she is exploring the option of accepting credit cards, even though it entails a 2.5 percent fee deducted from sales receipts.In light of this, consider the following questions for discussion:1. **Advantages and Disadvantages of Offering Credit:** - What benefits and drawbacks might Kate encounter by offering credit to her customers?2. **Precautions Before Offering Credit:** - What safeguards should Kate implement before extending credit to individuals like John?3. **Credit Terms and Journal Entries:** - If Kate grants credit to John with terms of 2/10, n/30, and payment occurs within the 10-day discount period, how should the journal entries for the sale and subsequent payment be recorded?4. **Journal Entry for Late Payment:** - In the event John pays on the 25th day, how should the corresponding journal entry be filed?5. **Alternative Financing Approach:** - Instead of financing directly, Kate could permit the use of credit cards. Assuming a monthly credit card sale total of $15,000, how would she record the sales journal entry considering associated credit card fees, if the total cost of goods sold equaled $13,500?This educational exercise aims to deepen your understanding of credit management, financial recording, and strategic planning in business operations. ### General Journal Template OverviewThe image displays a general journal template used for recording financial transactions. Here’s a detailed explanation of the layout and how to fill it out:---#### Columns and Headings1. **Posting Reference**: - This column is used to reference the ledger pages to which these journal entries correspond. It ensures accurate tracking and auditing of financial data.2. **Description**: - This section holds the details of each transaction. Typically, it includes the type of transaction and involved accounts, providing clarity and context.3. **Debit**: - Amounts to be debited from accounts are entered in this column. According to accounting principles, debits either increase assets or expenses or decrease liabilities, equity, or income.4. **Credit**: - Amounts to be credited to accounts are entered here. Credits typically decrease assets or expenses and increase liabilities, equity, or revenue.---#### Rows- **Row 3**: - Beginning of a new transaction. Entries made in the description provide the narrative for the transaction being recorded. - Corresponding debit and credit amounts must be accurately filled.- **Row 4**: - Represents another transaction, possibly related to sequential business activities occurring after the entries in Row 3.- **Row 5**: - Contains entries for another financial transaction. It offers a structured approach to documenting successive financial events within the same period.---This template emphasizes the double-entry accounting system, where every entry involves simultaneous debits and credits to maintain the ledger's balance. Proper usage of the general journal aids in comprehensive financial management and reporting.

The following calculations are done in the records of Kate to evaluate the greeting card.Formula Sheet: Answer Sheet:

Cards from Chapters I through 7.) Kate has put a lot of time and effort into streamlining the process to design and produce a greet- ing card. She has documented the entire process in a QuickTime video she produced on her iMac. The video takes the viewer through the step-by-step process of selecting hardware and software, and chows how to design and produce the card. Kate has met many people who would like to get into the production of greeting cards, but are overwhelmed by the process. Kate has decided to sell the entire package (hardware, software, and video tutorial) to aspiring card producers. The cost of the entire package to Kate is $4,500 and she plans to mark it up by $500 and sell it for $5,000. John Stevens, an individual Kate met recently at a greeting card conference, would like to buy the pack- age from Kate. Unfortunately, John does not have this much cash and would like for Kate to extend credit. Kate believes that many of her customers will not be able to pay cash and, therefore, she will need to find some way to provide financing. One option she is exploring is to accept credit cards. She learned that the credit card provider charges a 2.5 percent fee and provides immediate cash upon receiving the sales receipts. Kate would like you to answer the following questions: SP

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q