Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 6, Problem 13RE
Kasey’s Cake Shop made $20,000 in sales of wedding cakes in July. All of these sales were on bank credit cards. The credit card company charges a 3.5% collection fee. Prepare Kasey’s
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Archer allows customers to use bank credit cards to charge purchases. The bank used by Archer processes all bank credit cards in exchange for a 3% processing fee. All credit card receipts deposited are credited to the company account on the day of deposit. Assume that on August 10, Archer sold and deposited $5,200 worth of bank credit card receipts. The cost of sales is $2,800. Record this transaction in the general journal.
If a company accepts credit cards, they must record the expense on their books. Please prepare the journal entries for the following scenario: Company A sells $480,000 on credit card sales. The credit card charges a 4.5% fee for the use of the card. The card company also deposits the cash into the company’s bank account the same night as the credit cards are accepted.
The College Store accepts MasterCard for payments of purchases made by students. The credit card drafts are deposited directly in a bank account. MasterCard charges a 1.55% collection fee. Credit card drafts totalling $10,000 are deposited during August. What increases when recording the sales and deposits?
accounts receivable by $9,854
service charge expense by $155
sales by $ 9,854
cash by $10,000
Chapter 6 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 6 - What are the components of cash? What items may be...Ch. 6 - Prob. 2GICh. 6 - Prob. 3GICh. 6 - Prob. 4GICh. 6 - Prob. 5GICh. 6 - How are trade receivables different from nontrade...Ch. 6 - How is revenue recognition related to the...Ch. 6 - Prob. 8GICh. 6 - Prob. 9GICh. 6 - What is a sales return? A sales allowance?...
Ch. 6 - Discuss the differences between the allowance...Ch. 6 - Prob. 12GICh. 6 - Prob. 13GICh. 6 - What method of bad debt estimation categorizes...Ch. 6 - Why does the write-off of uncollectible accounts...Ch. 6 - Discuss the difference between a secured borrowing...Ch. 6 - When does a company record the transfer of...Ch. 6 - Prob. 18GICh. 6 - What is a non-interest-bearing note? How does...Ch. 6 - Prob. 20GICh. 6 - How are the cash proceeds determined when a note...Ch. 6 - Under IFRS, what criteria must be satisfied in...Ch. 6 - Prob. 23GICh. 6 - (Appendix 6. 1) What is the purpose of a petty...Ch. 6 - (Appendix 6. 7) Why are actual expenses, rather...Ch. 6 - Prob. 26GICh. 6 - Prob. 27GICh. 6 - Prob. 1MCCh. 6 - Greenfield Company had the following cash balances...Ch. 6 - A company is in its first year of operations and...Ch. 6 - Marmol Corporation uses the allowance method for...Ch. 6 - On January 1, 2019, King Companys Allowance for...Ch. 6 - Prior to adjustments, Barrett Companys account...Ch. 6 - A method of estimating bad debts that focuses on...Ch. 6 - When the accounts receivable of a company are sold...Ch. 6 - Prob. 9MCCh. 6 - Prob. 10MCCh. 6 - Prob. 11MCCh. 6 - On December 31, Harrison Company reports the...Ch. 6 - Lindley Enterprises sells hand woven rugs. Paige...Ch. 6 - Long Corporation is a fabric manufacturing...Ch. 6 - Refer to RE6-3. Assume Long records accounts...Ch. 6 - Longmire Sons nude sales un credit to Alderman...Ch. 6 - Refer to RE6-5. Assume Longmire uses a perpetual...Ch. 6 - McKinney Co. estimates its uncollectible accounts...Ch. 6 - Refer to RE6-7. At the end of the first quarter of...Ch. 6 - Refer to RE6-8. On April 23, 2020, McKinncy Co....Ch. 6 - On December 1 of the current year, Jordan Inc....Ch. 6 - On December 1 of the current year, Jordan Inc....Ch. 6 - On December 1, Newton Enterprises sells 100,000 of...Ch. 6 - Kaseys Cake Shop made 20,000 in sales of wedding...Ch. 6 - On June 1, Phillips Corporation sold, with...Ch. 6 - Prob. 15RECh. 6 - Prob. 16RECh. 6 - Computing; the Cash Balance Listed below are ten...Ch. 6 - Prob. 2ECh. 6 - Journal Entry to Separate Receivables An...Ch. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - Prob. 6ECh. 6 - Accounts Receivable Calculations The following...Ch. 6 - Estimation versus Direct Write-Off of Bad Debts...Ch. 6 - Estimating Bad Debts from Receivables Balances The...Ch. 6 - Aging Analysis of Accounts Receivable Cowens, a...Ch. 6 - Comparison of Bad Debt Estimation Methods Bradford...Ch. 6 - Inferring Accounts Receivable Amounts At the end...Ch. 6 - ReceivablesBad Debts At January 1, 2019, the...Ch. 6 - Transferring Accounts Receivable White Corporation...Ch. 6 - Transfer of Accounts Receivable Inder Corporation...Ch. 6 - Generating Cash from Receivables Guide Company...Ch. 6 - Interest-Bearing and Non-Interest-Bearing Notes On...Ch. 6 - Computing the Proceeds from the Sale of Notes...Ch. 6 - Recording the Sale of Notes Receivable Singer...Ch. 6 - Prob. 20ECh. 6 - Prob. 21ECh. 6 - Prob. 22ECh. 6 - Prob. 23ECh. 6 - Prob. 24ECh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Estimating Bad Debts Keegan Corporations...Ch. 6 - Allowance for Bad Accounts Installment Jewelry...Ch. 6 - Allowance for Doubtful Accounts From inception of...Ch. 6 - Prob. 6PCh. 6 - Aging Accounts Receivable On September 30. 2019...Ch. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Factoring and Assignment of Accounts Receivable...Ch. 6 - Recording Note Transactions The following...Ch. 6 - Notes Receivable Transactions The following notes...Ch. 6 - Analyzing Accounts Receivable Upham Companys June...Ch. 6 - Comprehensive Receivables Problem Blackmon...Ch. 6 - Prob. 16PCh. 6 - Unknown Book Balance (Appendix 6.1) The following...Ch. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 1CCh. 6 - Prob. 2CCh. 6 - Bad Debt Expense When a company has a policy of...Ch. 6 - Prob. 4CCh. 6 - Receivables Issues Magrath Company has an...Ch. 6 - Components of Cash Cash is an important asset of a...Ch. 6 - Prob. 7CCh. 6 - Transfer of Accounts and Notes Receivable Tidal...Ch. 6 - Ethics and Sales Returns At the end of 2019, the...Ch. 6 - Analyzing Starbuckss Cash and Receivables...Ch. 6 - Researching GAAP Situation Hamilton Company...
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- American Signs allows customers to pay with their Jones credit card and cash. Jones charges American Signs a 3.5% service fee for each credit sale using its card. Credit sales for the month of June total $328,430, where 40% of those sales were made using the Jones credit card. Based on this information, what will be the total in Credit Card Expense at the end of June?arrow_forwardA small retailer allows customers to use two different credit cards in charging purchases. The CC Bank Card assesses a 4.6% service charge for credit card sales. The VIZA Card assesses a 3.8% charge on sales for using its card. This retailer also has its own store credit card. As of Feb 28 month-end, the retailer earned $65 in net interest revenue on its own card. Prepare journal entries to record the following selected credit card transactions. Feb. 2 Sold merchandise for $3,000 (that had cost $1800) and accepted the customer’s CC Bank Card. Feb. 6 Sold merchandise for $2200 (that had cost $1500) and accepted the customer’s VIZA Card. Feb 28 Recognized the $65 interest revenue earned on its store credit card for January.arrow_forwardHome Appliances allows customers to pay for merchandise with cash, debit cards, bank credit cards, or a Home Appliance Credit Card. The bank charges Home Appliances $1.00 for each debit card sale and a 4% fee for bank credit card sales. On September 25 a customer makes a $1,200 purchase from Home Appliances using her debit card. 1. Instructions: Prepare Home Appliances' journal entry to record this transaction. b. Assume instead the customer pays for her purchase using her Mastercard. Record the a. transaction. С. Assume instead the customer uses her Home Appliances store credit card. Record the transaction.arrow_forward
- please help me to solve thisarrow_forwardOn March 4, Micro Sales makes $4,850 in sales on bank credit cards that charge a 2.5% service charge. Funds are deposited net of credit card expenses into Micro Sales' bank account at the end of the business day. Journalize the sales and recognition of expense as a single journal entry.arrow_forwardCarla Vista's cash register tape showed sales of $59,000 on June 16 for charges to customers' MasterCards. The bank charges a service fee of 3%. Prepare the entry to record MasterCard credit card sales. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Jun. 16 Debit Creditarrow_forward
- On March 4, Micro Sales makes $10,500 in sales on bank credit cards that charge a 2% service charge and deposits the funds into Micro Sales' bank accounts at the end of the business day. Required: Journalize the sales and recognition of expense as a single journal entry. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to two decimal places.arrow_forwardFiori publishes ratings and reviews of hotels and restaurants for traveling salespeople. As of June 31, Fiori’s ledger Cash balance is $31,466. The June bank statement balance is $70,616, and includes the following items. Bank service charge for June, $50 NSF check returned with June bank statement, $2,300 Note collected for your company by the bank in June, $25,000 Interest on note collected by the bank in June, $2,500 Outstanding checks as of the end of June, $21,000 Deposit in transit at the end of June, $7,000 Prepare Fiori’s June bank reconciliation. b. Prepare the journal entries to conform Fiori’s ledger Cash account balance with the reconciled bank balance as of June 3o.arrow_forwardOn March 4, Micro Sales makes $10,500 in sales on bank credit cards that charge a 3% service charge and deposits the funds into Micro Sales' bank accounts at the end of the business day. Journalize the sales and recognition of expense as a single journal entry. If an amount box does not require an entry, leave it blank. Mar. 4arrow_forward
- Instructions Chart of Accounts General Journal Instructions Kasey's Cake Shop made $30,000 in sales of wedding cakes in July. All of these sales were on bank credit cards. The credit card company charges a 2.0% collection fee. Required: Prepare Kasey's journal entry to record the credit card sales.arrow_forwardCatherines Cookies has a beginning balance in the Accounts Payable control total account of $8,200. In the cash disbursements journal, the Accounts Payable column has total debits of $6,800 for November. The Accounts Payable credit column in the purchases journal reveals a total of $10,500 for the current month. Based on this information, what is the ending balance in the Accounts Payable account in the general ledger?arrow_forwardprepare journal entriesarrow_forward
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