Problem 7 6A Unmatched Elegance Gift Shop sells cards, supplies, and various holiday greeting cards Sales to retail customers are subject to an 8 percent sales tax The firm sells it merchandise for cash to customers using bank credit cards, such as MasterCard and VISA and to customers using American Express The bank credit cards charge a 2 percent fee American Express charges a 3 percent fee Unmatched Elegance Gift Shop also grants trade discounts to certain wholesale customers who place large orders These orders are not subject to sales tax During February 2016, Unmatched Elegance Gift Shop engaged in the following transactions Date Transactions 2016 Feb 1 Sold crystal goods to Beautiful Kitchens, a wholesale customer The list price is $5,000, with a 30 percent trade discount This sale is not subject to sales tax Issued Invoice 5950 with terms of n 15 Feb 15 Recorded cash sales for the period from February 1 to February 15 of $9,500 plus sales tax of $760 Feb 15 Recorded sales for the period from February 1 to February 15 to customers using bank credit cards of $13,000 plus sales tax of $1,040 (Record the 2 percent credit card expense at this time ) Feb 16 Received a check from Beautiful Kitchens in payment of Invoice 5950 dated February 1 Feb 16 Sold merchandise to customers using American Express for $9,000 plus sales tax of $720 Feb 17 Sol a set of Roman statues to Incredible Bedrooms, a wholesale customer The list price is $9,000, with a 20 percent trade discount This sale is not subject to sales tax Issued Invoice 5951 with terms of n 15 Feb 20 Received payment from American Express for amount billed on February 16, less a 3 percent credit card expense Feb 27 Received a check from Incredible Bedrooms in payment of Invoice 5951 dated February 17 Feb 28 Recorded cash sales for the period of February 16 to February 28 of $7,750 plus sales tax of $620 Feb 28 Recorded sales for the period from February 16 to February 28 to customers using bank credit cards of $15,000 plus tax of $1,200 (Record the 2 percent credit card expense at this time ) Feb 28 Sold merchandise to customers using American Express for $10,200 plus sales tax of $816 Instructions Open the general ledger accounts indicated below and enter the balances a of February 1, 2016 Record the transactions in a general journal Use 10 as the journal page number Post the entries from the general journal to the appropriate accounts in the general ledger General Ledger Accounts 101 Cash, $23,230 Dr 401 Sales 121 Accounts Receivable 521 Credit Card Expense 222 Sales Tax Payable Analyze What was the total credit card expense incurred in February

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 05, 2024

Problem 7.6A. Unmatched Elegance Gift Shop sells cards, supplies, and various holiday greeting cards. Sales to retail customers are subject to an 8 percent sales

Problem 7.6A. Unmatched Elegance Gift Shop sells cards, supplies, and various holiday greeting cards. Sales to retail customers are subject to an 8 percent sales tax. The firm sells it merchandise for cash; to customers using bank credit cards, such as MasterCard and VISA; and to customers using American Express. The bank credit cards charge a 2 percent fee. American Express charges a 3 percent fee. Unmatched Elegance Gift Shop also grants trade discounts to certain wholesale customers who place large orders. These orders are not subject to sales tax. During February 2016, Unmatched Elegance Gift Shop engaged in the following transactions:

Date	Transactions
2016
Feb 1	Sold crystal goods to Beautiful Kitchens, a wholesale customer. The list price is $5,000, with a 30 percent trade discount. This sale is not subject to sales tax. Issued Invoice 5950 with terms of n/15.
Feb 15	Recorded cash sales for the period from February 1 to February 15 of $9,500 plus sales tax of $760.
Feb 15	Recorded sales for the period from February 1 to February 15 to customers using bank credit cards of $13,000 plus sales tax of $1,040. (Record the 2 percent credit card expense at this time.)
Feb 16	Received a check from Beautiful Kitchens in payment of Invoice 5950 dated February 1.
Feb 16	Sold merchandise to customers using American Express for $9,000 plus sales tax of $720.
Feb 17	Sol a set of Roman statues to Incredible Bedrooms, a wholesale customer. The list price is $9,000, with a 20 percent trade discount. This sale is not subject to sales tax. Issued Invoice 5951 with terms of n/15.
Feb 20	Received payment from American Express for amount billed on February 16, less a 3 percent credit card expense.
Feb 27	Received a check from Incredible Bedrooms in payment of Invoice 5951 dated February 17.
Feb 28	Recorded cash sales for the period of February 16 to February 28 of $7,750 plus sales tax of $620.
Feb 28	Recorded sales for the period from February 16 to February 28 to customers using bank credit cards of $15,000 plus tax of $1,200. (Record the 2 percent credit card expense at this time.)
Feb 28	Sold merchandise to customers using American Express for $10,200 plus sales tax of $816.

Instructions

Open the general ledger accounts indicated below and enter the balances a of February 1, 2016.
Record the transactions in a general journal. Use 10 as the journal page number.
Post the entries from the general journal to the appropriate accounts in the general ledger.

General Ledger Accounts

101 Cash, $23,230 Dr. 401 Sales

121 Accounts Receivable 521 Credit Card Expense

222 Sales Tax Payable

Analyze: What was the total credit card expense incurred in February?