Mayfair Co. allows select customers to make purchases on credit. Its other custo

Question

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 5.5% service charge for sales on its credit card. Access deducts a 4.5% service charge for sales on its card. Mayfair completes the following transactions in June.

June 4 Sold $700 of merchandise on credit (that had cost $280) to Natara Morris. 5 Sold $8,600 of merchandise (that had cost $3,440) to customers who used their Zisa cards. 6 Sold $5,998 of merchandise (that had cost $2,399) to customers who used their Access cards. 8 Sold $4,640 of merchandise (that had cost $1,856) to customers who used their Access cards. 13 Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $360 balance in McKee’s account stemmed from a credit sale in October of last year. 18 Received Morris’s check in full payment for the purchase of June 4. Help Save &I; Che Required information The following information applies to the questions displayed below At December 31, 2017, Hawke Company reports the following results for its calendar year Cash sales Credit sales $1,644,820 3,686,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable Allowance for doubtful accounts $1,116,858 debit 17,290 debit 3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1c Pre 4 of 4 Nex earch

Explanation / Answer

Date Account Titles and Explanation Debit Credit June 4 Accounts receivable—N. Morris $700.00 Sales $700.00 June 4 Cost of goods sold $280.00 Merchandise inventory $280.00 June 5 Cash (balance) $8,127.00 Credit card expense = $8600 x 5.5% $473.00 Sales $8,600.00 June 5 Cost of goods sold $3,440.00 Merchandise inventory $3,440.00 June 6 Cash (balance) $5,728.09 Credit card expense = $5998 x 4.5% $269.91 Sales $5,998.00 June 6 Cost of goods sold $2,399.00 Merchandise inventory $2,399.00 June 8 Cash (balance) $4,431.20 Credit card expense = $4640 x 4.5% $208.80 Sales $4,640.00 June 8 Cost of goods sold $1,856.00 Merchandise inventory $1,856.00 June 13 Allowance for doubtful accounts $360.00 Accounts receivable—A. McKee $360.00 June 18 Cash $700.00 Accounts receivable—N. Morris $700.00

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