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CHAPTER 7 QS 7-1 Credit card sales L.O. C1 Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system). (Omit the "$" sign in your response.) 1. Sold $10,000 of merchandise, that cost $7,500, on MasterCard credit cards. The net cash receipts from sales are immediately deposited in the sellers bank account. MasterCard charges a 5% fee. General Journal Debit Credit Cash Credit card expense Sales 10,000 Cost of goods sold 7,500 Merchandise inventory 7,500 2. Sold $3,000 of merchandise, that cost $1,500, on an assortment of credit cards. Net cash receipts are received 7 days later, and a 4% fee is charged. General Journal Debit Credit Day of sale Accounts receivable-Credit card cos. Credit card expense Sales 3,000 Cost of goods sold 1,500 Merchandise inventory 1,500 7 days later Cash 2,880 Accounts receivable-Credit card cos. 2,880 QS 7-2 Allowance method for bad debts L.O. P2 Milner Corp. uses the allowance method to account for uncollectibles. On October 31, it wrote off a $1,000 account of a customer, C. Schaub. On December 9, it receives a $200 payment from Schaub. 1. Prepare the journal entry for October 31. (Omit the "$" sign in your response.) Date General Journal Debit Credit Oct. 31 Allowance for doubtful accounts 1,000 Accounts receivable-C. Schaub 1,000 2. Prepare the entries for December 9; assume no additional money is expected from Schaub. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 9 Accounts receivable-C. Schaub 200 Allowance for doubtful accounts 200 9 Cash 200 Accounts receivable-C. Schaub 200 QS 7-3 Percent of accounts receivable method L.O. P2 Wecker Companys year-end unadjusted trial balance shows accounts receivable of $89,000, allowance for doubtful accounts of $500 (credit), and sales of $270,000. Uncollectibles are estimated to be 1.5% of accounts receivable. 1. Prepare the December 31 year-end adjusting entry for uncollectibles. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31 Bad debts expense 835 Allowance for doubtful accounts 835 2. What amount would have been used in the year-end adjusting entry if the allowance account had a year-end unadjusted debit balance of $200? (Omit the "$" sign in your response.) Amount used in the year-end adjusting entry $ 1,535 QS 7-4 Percent of sales methods L.O. P2 Wecker Companys year-end unadjusted trial balance shows accounts receivable of $89,000, allowance for doubtful accounts of $500 (credit), and sales of $270,000. Uncollectibles are estimated to be 1.0% of sales. Prepare the December 31 year-end adjusting entry for uncollectibles. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31 Bad debts expense 2,700 Allowance for doubtful accounts 2,700 Exercise 7-11 Honoring a note L.O. P3 Following are selected transactions for Eduardo Company.... View Full Document

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