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Exam 2 ReviewPractice Exercises
Elmo Company has an agreement with a Big Bird Credit CardCompany that calls for cash to be received immediately upon depositof Elmo’s customers' credit card sales receipts. The credit cardcompany receives 2% of card sales as its fee. If Elmo has $6,500 incredit card sales on April 8th, prepare the appropriate journal entryto record the credit card sales.Ch. 7 - Credit Card SalesDateDebitCreditApr. 086,3701306,500Credit Card Expense ($6,500 x 0.02)CashSalesGeneral Journal
Peter Rabbit Company deposits all cash receipts on the day when they are received and it makes all cash payments by check.Prepare a bank reconciliation for the company using the above information.Bank statement balance$29,900Book balance$36,163Add:Add:Deposit of May 319,5609,560Deduct:Deduct:Outstanding checks4,300Bank service charge250NSF check8164,3001,066Adjusted bank balance$35,160Adjusted book balance$35,160d. Check No. 504, listed with the canceled checks, was correctly drawn for $518 in payment of a utility bill onMay 15. Peter Rabbit incorrectly recorded it with a debit to Utilities Expense and credit to Cash of $581.e.A debit memorandum for $816 refers to a $816 NSF check from a customer; the company has not yetPeter Rabbit CompanyBank Reconciliation