On January 15, Tundra Co. sold merchandise to customers for cash of $42,000 (cost $28,500). Merchandise costing $10,500 was sold to customers for $15,800 on January 17; terms 2/10, n/30. Sales totaling $296,000 (cost $198,000) were recorded on January 20 to customers using MasterCard, a credit card that charges a 2% fee. On January 25, sales of $72,000 (cost $48,200) were made to debit card customers. The bank charges Tundra a flat fee of 0.5% on all debit card transactions.
Required
Prepare journal entries for each of the transactions described (assume a perpetual inventory system).
Analysis Component:
Identify the advantages and disadvantages of each type of sale: cash sale, credit sale, credit card sale, or debit card sale. Explain why Tundra would likely accept all these types of sales.