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Credit Card Sales Valderi's Gallery sells quality art work, with prices for individual pieces ranging from $500 to $25,000. Sales are infrequent, typically only three
Credit Card Sales Valderi's Gallery sells quality art work, with prices for individual pieces ranging from $500 to $25,000. Sales are infrequent, typically only three to five pieces per week. The following transactions occurred during the first week of June 2012. Perpetual inventory is used.
Jun.1 | Sold a framed print to Kerwin Antiques on account, with 2/10,n/30 credit terms for | $900 | ($600 | cost) |
Jun.2 | Sold three framed etchings to Maria Alvado, totaling | $2,500 | ($1,600 | cost) |
who used the United Merchants Card to charge the cost of the etchings. Valderi | ||||
mailed the credit card sales slip to United Merchants the same day. United Merchants | ||||
will send a check within seven days after deducting a 1 % fee. | ||||
Jun.4 | Sold an oil painting to Shaun Chandler, who paid with a personal check: | $1,900 | ($1,100 | cost) |
Jun.5 | Sold a watercolor to Julie and John Malbie, who used their Great American Bank | |||
Card to charge the purchase of the painting. Valderi deposited the credit card | ||||
sales slip the same day and received immediate credit in the company's checking account. | ||||
The bank charged a 2% fee. The painting was sold for: | $2,100 | ($1,400 | cost) | |
Jun.6 | Received payment from Kerwin Antiques for its June 1 purchase. | |||
Jun.7 | Received a check from United Merchants for the June 2 sale. |
Required Prepare journal entries to record the Valderi Gallery transactions. General Journal Debit Description Date June 1 Accounts Receivable Kerwin Antiques 900 Cost of Goods Sold To record credit sales revenue. June 1 To record cost of goods sold. June 2 Credit Card Fee Expense To record credit card sales. June 2 Credit 600
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