Atlas Co. allos select customers to make purchases on Credits. Its other custome
ID: 2384643 • Letter: A
Question
Atlas Co. allos select customers to make purchases on Credits. Its other customers can use either of two cards:Zisa or Access. Zisa deducts a 3% service charge fro sales on its credit card and credits the bank account of Altas immediately when credit card receipts are deposits the Zisa credit cared receipts each business day. When customers use Access credit cards, Altas accumulates the receipts for several days before submitting them to Access for payment. Access deducts a 2% service charge and usually pays within one week of being billed. Atlas completes the following transactions in June. ( The term of all credit sales are 2/15, n/30, and all sales are recorded at the gross price.)June 4 Sold $750 of merchandise (that had cost $500) on credit to Anne Cianci.
5 Sold $5,900 of merchandise (that had cost $3,200) to customers who used their Zisa cards.
June 6 Sold $4,800 of merchandise (that had cost $2,800) to customers who used their Access cards.
June 8 Sold $3,200 of merchandise (that had cost $1,900) to customers who used their Access cards.
June 10 Submitted Access card receipts accumulated since June 6 to credit card company for payment.
June 13 Wrote off the account of Nakia Well against the allowance for Doubtful Accounts. The $329 balance in Well's account stemmed from a credit sale in October of last year.
June 17 Received the amount due from Access.
June 18 Received Cianci's check in full payment for the purchase of June 4.
Explanation / Answer
June 4 Sold $750 of merchandise (that had cost $500) on credit to Anne Cianci. 4 Jun yyyy Acct Rxable Dr 750 Sales A/C Cr 750 4 Jun yyyy Cost of goods sold Dr 500 Merchandise inventory Cr 500 (Sold merchandise on credit to Anne, recorded COGS also) 5 Sold $5,900 of merchandise (that had cost $3,200) to customers who used their Zisa cards. 5 Jun yyyy Cash Dr 5,723 Sevice charge exp Dr 177 Sales A/C Cr 5900 5 Jun yyyy Cost of goods sold Dr 3200 Merchandise inventory Cr 3200 (Sold merchandise on credit using Ziza 3%*5900 =177, recorded COGS also. Here CC sales are reocrded as Cash sales as Zisa rxpt sare sent daily & Cash is also rxd on daily basis) June 6 Sold $4,800 of merchandise (that had cost $2,800) to customers who used their Access cards. 6 Jun yyyy Acct Rxable -Access Dr 4800 Sales A/C Cr 4800 6 Jun yyyy Cost of goods sold Dr 2800 Merchandise inventory Cr 2800 (Sold merchandise on credit using Acces 2%*4800 =96, recorded COGS also) June 8 Sold $3,200 of merchandise (that had cost $1,900) to customers who used their Access cards. 8 Jun yyyy Acct Rxable-Access Dr 3200 Sales A/C Cr 3200 8 Jun yyyy Cost of goods sold Dr 1900 Merchandise inventory Cr 1900 (Sold merchandise on credit using Acces 2%*3200 =64, recorded COGS also) June 10 Submitted Access card receipts accumulated since June 6 to credit card company for payment. no journal is made when the credit card receipts are sent to the credit card company. If this is recorded in the G/L at all it would be as a memo entry only June 13 Wrote off the account of Nakia Well against the allowance for Doubtful Accounts. The $329 balance in Well's account stemmed from a credit sale in October of last year. 13 Jun yyyy Allow for Doubtful Accts Dr 329 Acct rxable Cr 329 (Towrite off of Acct of Nakia Wall) June 17 Received the amount due from Access. 17 Jun yyyy Cash Dr 7,840 Credit card expense Dr 160 Acct Rxable - Access Cr 8000 (To record Cash rxd from Access less CC Comm of 2% of Card sales (4800+3200) & Comm 96+64=160) June 18 Received Cianci's check in full payment for the purchase of June 4. 18 Jun yyyy Cash Dr 735 Sales Disc Dr 15 Acct Rxable Cr 750 (Recorded amount Rxd from Cianci & given Sales disc 2%*750 = 15)
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