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Credit Card Sales Ruth Anne's Fabrics accepts cash, personal checks, and two credit cards when customers buy merchandise. With the Great American Bank Card, Ruth Anne's Fabrics receives an immediate deposit in its checking account when credit card sales slips are deposited at the bank. The bank charges a 4% fee. With the United Merchants Card, Ruth Anne's Fabrics mails the credit card sales slips to United Merchants' regional processing center each day. United Merchants accumulates these slips for three days and then mails a check to Ruth Anne's Fabrics, after deducting a 3% fee. Prepare journal entries to record the following: Round to the nearest dollar. a. Sales for March 15 were as follows: Cash and checks $1,050 Great American Bank Card (Deposited at the end of the day) 1,300 United Merchants Card (Mailed at the end of the day) 900 $3,250 b. Received a check from United Merchants on March 20 for: $4,178| a. General Journal Date Mar.15 Cash Description Debit 1,050 × $ Credit Accounts Receivable - United Merchants 900 × | Credit Card Fee Expense 0 x Sales Revenue | To record cash and credit card sales. b. General Journal Debit Credit Description Mar.20 Accounts Receivable - United Merchants Date 4,178 v s Sales Revenue 4,178 v

Credit Card Sales Ruth Anne's Fabrics accepts cash, personal checks, and two credit cards when customers buy merchandise. With the Great American Bank Card, Ruth Anne's Fabrics receives an immediate deposit in its checking account when credit card sales slips are deposited at the bank. The bank charges a 4% fee. With the United Merchants Card, Ruth Anne's Fabrics mails the credit card sales slips to United Merchants' regional processing center each day. United Merchants accumulates these slips for three days and then mails a check to Ruth Anne's Fabrics, after deducting a 3% fee. Prepare journal entries to record the following: Round to the nearest dollar. a. Sales for March 15 were as follows: Cash and checks $1,050 Great American Bank Card (Deposited at the end of the day) 1,300 United Merchants Card (Mailed at the end of the day) 900 $3,250 b. Received a check from United Merchants on March 20 for: $4,178| a. General Journal Date Mar.15 Cash Description Debit 1,050 × $ Credit Accounts Receivable - United Merchants 900 × | Credit Card Fee Expense 0 x Sales Revenue | To record cash and credit card sales. b. General Journal Debit Credit Description Mar.20 Accounts Receivable - United Merchants Date 4,178 v s Sales Revenue 4,178 v

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter7: Receivables And Investments
Section: Chapter Questions
Problem 7.9E
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Credit Card Sales Ruth Anne's Fabrics accepts cash, personal checks, and two credit cards when customers buy merchandise. With the Great American Bank Card, Ruth Anne's Fabrics receives an immediate deposit in its checking account when credit card sales slips are deposited at the bank. The bank charges a 4% fee. With the United Merchants Card, Ruth Anne's Fabrics mails the credit card sales slips to United Merchants' regional processing center each day. United Merchants accumulates these slips for three days and then mails a check to Ruth Anne's Fabrics, after deducting a 3% fee. Prepare journal entries to record the following: Round to the nearest dollar. a. Sales for March 15 were as follows: Cash and checks $1,050 Great American Bank Card (Deposited at the end of the day) 1,300 United Merchants Card (Mailed at the end of the day) 900 $3,250 b. Received a check from United Merchants on March 20 for: $4,178 а. General Journal Date Description Debit Credit Mar.15 Cash $ 1,050 x $ Accounts Receivable - United Merchants 900 x Credit Card Fee Expense Sales Revenue 0 x To record cash and credit card sales. b. General Journal Date Description Debit Credit Mar.20 Accounts Receivable - United Merchants 4,178 v $ Sales Revenue 4,178 v To record receipt of check from United Merchants.
Transcribed Image Text:Credit Card Sales Ruth Anne's Fabrics accepts cash, personal checks, and two credit cards when customers buy merchandise. With the Great American Bank Card, Ruth Anne's Fabrics receives an immediate deposit in its checking account when credit card sales slips are deposited at the bank. The bank charges a 4% fee. With the United Merchants Card, Ruth Anne's Fabrics mails the credit card sales slips to United Merchants' regional processing center each day. United Merchants accumulates these slips for three days and then mails a check to Ruth Anne's Fabrics, after deducting a 3% fee. Prepare journal entries to record the following: Round to the nearest dollar. a. Sales for March 15 were as follows: Cash and checks $1,050 Great American Bank Card (Deposited at the end of the day) 1,300 United Merchants Card (Mailed at the end of the day) 900 $3,250 b. Received a check from United Merchants on March 20 for: $4,178 а. General Journal Date Description Debit Credit Mar.15 Cash $ 1,050 x $ Accounts Receivable - United Merchants 900 x Credit Card Fee Expense Sales Revenue 0 x To record cash and credit card sales. b. General Journal Date Description Debit Credit Mar.20 Accounts Receivable - United Merchants 4,178 v $ Sales Revenue 4,178 v To record receipt of check from United Merchants.
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