Question
QUESTION 1 Mayfair Co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access.
QUESTION 1
Mayfair Co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access. Zisa deducts a 3.0% service charge for sales on its credit card. Access deducts a 2.0% service charge for sales on its card. Mayfair completes the following transactions in June.
Required: Prepare journal entries to record the preceding transactions and events. (The company uses the perpetual inventory system.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.)
June | 4 | Sold $700 of merchandise on credit (that had cost $350) to Natara Morris terms n/30. | ||
5 | Sold $9,600 of merchandise (that had cost $4,800) to customers who used their Zisa cards. | |||
6 | Sold $6,084 of merchandise (that had cost $3,042) to customers who used their Access cards. | |||
8 | Sold $4,950 of merchandise (that had cost $2,475) to customers who used their Access cards. | |||
13 | Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $364 balance in McKees account stemmed from a credit sale in October of last year. | |||
18 | Received Morriss check in full payment for the purchase of June 4. |
QUESTION 2
Liang Company began operations on January 1, 2017. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. 2017
- Sold $1,345,300 of merchandise (that had cost $976,400) on credit, terms n/30.
- Wrote off $18,900 of uncollectible accounts receivable.
- Received $672,200 cash in payment of accounts receivable.
- In adjusting the accounts on December 31, the company estimated that 2.20% of accounts receivable will be uncollectible.
2018
- Sold $1,541,000 of merchandise on credit (that had cost $1,316,900), terms n/30.
- Wrote off $29,900 of uncollectible accounts receivable.
- Received $1,327,500 cash in payment of accounts receivable.
- In adjusting the accounts on December 31, the company estimated that 2.20% of accounts receivable will be uncollectible.
Required: Prepare journal entries to record Liangs 2017 and 2018 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar amount.)
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