Mayfair Co allows select customers to make purchases on credit Its other custome
ID: 2459452 • Letter: M
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 6.5% service charge for sales on its credit card and credits the bank account of Mayfair immediately when credit card receipts are deposited Mayfair the Zisa credit card receipts each business day When customers use Access credit cards Mayfair accumulates the receipts for several days before submitting them to Access for payment Access a 6 5% service charge and usually pays within one week of being billed Mayfair completes the following transactions in June (The terms of all credit sales are 2/15 n/30 and all sales are recorded at the gross price ) June Sold $500 of merchandise (that had cost $200) on credit to Natara Morris Sold $6 700 of merchandise (that had cost $2 680) to customers who used their Zisa cards Sold $6.1% of merchandise (that had cost $2 478) to customers who used their Access cards Sold $4 880 of merchandise (that had cost S1 952) to customers who used their Access cards Submitted Access card receipts accumulated since June 6 to the credit card company for payment Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts The $678 balance in McKee s account stemmed from a credit sale in October of last year Received the amount due from Access Received Morris s check in full payment for the purchase of June 4 Required: Prepare journal entries to record the preceding transactions and events (The company uses the perpetual Inventory system ) (Round your final answers to the nearest whole dollar. If no entry Is required for a transaction/event. select No journal entry required" in the first account field.)Explanation / Answer
Journal entries
Date
Description
Debit
Credit
June 4
Account receivable – N Morris
$500
To Sales
$500
Cost of goods sold
$200
To Merchandise inventory
$200
June 5
Cash
$6,264.50
Credit card expense
435.50
To Sales
$6,700
Cost of goods sold
$2,680
To Merchandise inventory
$2,680
June 6
Account receivable - Access
$5,855.20
Credit card expense
340.78
To Sales
$6,196
Cost of goods sold
2,478
To Merchandise inventory
$2,478
June 8
Account receivable - Access
$4,611.60
Credit card expense
268.40
To Sales
$4,880
Cost of goods sold
$1,952
To Merchandise inventory
$1,952
June 10
No journal entry
June 13
Allowance for doubtful accounts
$678
To Account receivable
$678
June 17
Cash
$10,466.80
To Account receivable – access
$10,466.80
June 19
Cash
$470
Sales discount
10
To Account receivable
$500
Date
Description
Debit
Credit
June 4
Account receivable – N Morris
$500
To Sales
$500
Cost of goods sold
$200
To Merchandise inventory
$200
June 5
Cash
$6,264.50
Credit card expense
435.50
To Sales
$6,700
Cost of goods sold
$2,680
To Merchandise inventory
$2,680
June 6
Account receivable - Access
$5,855.20
Credit card expense
340.78
To Sales
$6,196
Cost of goods sold
2,478
To Merchandise inventory
$2,478
June 8
Account receivable - Access
$4,611.60
Credit card expense
268.40
To Sales
$4,880
Cost of goods sold
$1,952
To Merchandise inventory
$1,952
June 10
No journal entry
June 13
Allowance for doubtful accounts
$678
To Account receivable
$678
June 17
Cash
$10,466.80
To Account receivable – access
$10,466.80
June 19
Cash
$470
Sales discount
10
To Account receivable
$500