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Royal Gift Shop sells cards, supplies, and various holiday greeting cards. Sales to retail customers are subject to an 8 percent sales tax. The firm

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Royal 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 its 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 1 percent fee. American Express charges a 2 percent fee Royal Gift Shop also grants trade discounts to certain wholesale customers who place large orders. These orders are not subject to sales tax. During February 20X1, Royal Gift Shop engaged in the following transactions: DATE TRANSACTIONS zexi Feb. 1 Sold crystal goods to Lovely Kitchens, a wholesale customer. The list price is $4,300, with a 25 percent trade : discount. This sale is not subject to sales tax. Issued Invoice 595e with terms of n/15. 15 Recorded cash sales for the period from February 1 to February 15 of $8,800 plus sales tax of $704. 15 Recorded sales for the period from February 1 to February 15 to customers using bank credit cards of $12,300 plus sales tax of $984. (Record the 1 percent credit card expense at this time.) 16 Received a check from Lovely Kitchens in payment of Invoice 5950 dated February 1. 16 Sold merchandise to customers using American Express for $8,300 plus sales tax of $664. 17 Sold a set of Roman statues to Beautiful Bedrooms, a wholesale customer. The list price is $8,300, with a 30 percent trade discount. This sale is not subject to sales tax. Issued Invoice 5951 with terms of n/15. 20 Received payment from American Express for the amount billed on February 16, less a 2 percent credit card expense. 27 Received a check from Beautifu1 Bedrooms in payment of Invoice 5951 dated February 17. 28 Recorded cash sales for the period from February 16 to February 28 of $7,460 plus sales tax of $592. 28 Recorded sales for the period from February 16 to February 28 to customers using bank credit cards of $10,090 plus sales tax of $800. (Record the 1 percent credit card expense at this time.) 28 sold merchandise to customers using American Express for $9,500 plus sales tax of $760. Credit Card Expense Account No. 521 \& Prev 3 of 5 Next >

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