Question

Using the perpetual inventory system. (a) Sold merchandise on account, for $12,000, terms n/30. The cost of the merchandise sold was $6,500. (b) Sold merchandise to customers who used MasterCard and VISA, $9,500. The cost of the merchandise sold was $5,300. (c) Sold merchandise to customers who used American Express, $2,900. The cost of the merchandise sold was $1,700. (d) Paid an invoice from First National Bank for $385, representing a service fee for processing MasterCard and VISA sales. (e) Paid a $75 processing fee associated with sales made to customers who used American Express.

Answer 1

Answer and Explanation:

The journal entries are shown below:

a

Accounts Receivable $12,000

To Sales $12,000

(Being the merchandise is sold on credit)

Cost of Merchandise Sold $6,500

To Merchandise Inventory $6,500

(Being the cost of merchandise is recorded)

b

Cash $9,500

To Sales $9,500

(Being the merchandise is sold on credit)

Cost of Merchandise Sold $5,300

Merchandise Inventory $5,300

(Being the cost of merchandise is recorded)

c

Cash $2,900

To Sales $2,900

(Being the merchandise is sold on credit)

Cost of Merchandise Sold $1,700

Merchandise Inventory $1,700

(Being the cost of merchandise is recorded)

d

Credit Card Expense $385

To Cash $385

(Being the cash paid is recorded)

e

Credit Card Expense $75

To Cash $75

(Being the cash paid is recorded)