(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales allowances) Niagara Jewelry sells to retailers who then resell the products. Niagaradoes not offer sales discounts for early payment; it asks that customers pay in full within15 days or at the point of sale with a credit card. The company had the following selectedtransactions during July:July 2 Sold $150,000 of merchandise to Lakeside Jewels on account.Sold $12,000 of merchandise to Superior Crystals, which paid by credit card. Thecredit card company charges Niagara a fee of 2% on credit card sales.July 17Shining Stones noticed that some of the merchandise received was damaged, so itreturned $17,000 worth of merchandise to Niagara.July 30July 3July 16July 19Shining Stones paid the balance of what it owed for the purchase on July 17.Lakeside Jewels paid the balance of what it owed for the purchase on July 2.Sold $185,000 of merchandise to Shining Stones on account.Requirements1. Journalize Niagara’s July transactions. (You do not need to record the cost of goods sold)2. Calculate the gross sales revenue for the month.

Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter10: Accounting For Sales And Cash Receipts
Section: Chapter Questions
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(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; account
for sales allowances) Niagara Jewelry sells to retailers who then resell the products. Niagara
does not offer sales discounts for early payment; it asks that customers pay in full within
15 days or at the point of sale with a credit card. The company had the following selected
transactions during July:
July 2 Sold $150,000 of merchandise to Lakeside Jewels on account.
Sold $12,000 of merchandise to Superior Crystals, which paid by credit card. The
credit card company charges Niagara a fee of 2% on credit card sales.
July 17
Shining Stones noticed that some of the merchandise received was damaged, so it
returned $17,000 worth of merchandise to Niagara.
July 30
July 3
July 16
July 19
Shining Stones paid the balance of what it owed for the purchase on July 17.
Lakeside Jewels paid the balance of what it owed for the purchase on July 2.
Sold $185,000 of merchandise to Shining Stones on account.
Requirements
1. Journalize Niagara’s July transactions. (You do not need to record the cost of goods sold)
2. Calculate the gross sales revenue for the month.

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