Prepare Journal Entries for Accounting Transactions from Cars

School: Jefferson Community and Technical College - Course: ART MISC - Subject: Accounting

Accounting Entries Question 1 Prepare journal entries for the following transactions from Cars Plus. You should have two journal entries. Oct 18: Customer Angela Sosa purchased $132,980 worth of car parts with her standard credit card. The cost to Car Plus for the sale is $86,250. Standard credit card charges Car Plus a fee of 4% of the sale. Oct 24: Standard remits payment to Car Plus, less any fees. Journal Entry 1 (Oct 18): Dr: Accounts Receivable $132,980 Cr: Sales $132,980 To record the sale of car parts to Angela Sosa on credit Dr: Cost of Goods Sold $86,250 Cr: Inventory $86,250 To record the cost of car parts sold to Angela Sosa Dr: Credit Card Expense $5,319.20 Cr: Sales $5,319.20 To record the fee charged by the standard credit card company Journal Entry 2 (Oct 24): Dr: Cash $127,660.80 Dr: Credit Card Expense $5,319.20 Cr: Accounts Receivable $132,980 To record the receipt of payment from Standard for the sale, less credit card fees. Question 2 Consider the following transaction: On March 6, Fun Cards sells 540 card decks with a sales price of $7 per deck to Padma Singh. The cost to Fun Cards is $4 per deck. Prepare a journal 3 entry under each of the following conditions. Assume MoneyPlus charges a 2% fee for each sales transaction using its card. A. Payment is made using a credit, in-house account. B. Payment is made using a MoneyPlus credit card. Journal Entry: Dr: Accounts Receivable $3,780 (540 decks x $7 per deck) Cr: Sales $3,780 To record the sale of 540 card decks to Padma Singh on credit Dr: Cost of Goods Sold $2,160 (540 decks x $4 per deck) Cr: Inventory $2,160 To record the cost of the card decks sold to Padma Singh B. Payment is made using a MoneyPlus credit card. Journal Entry: Accounts Receivable $3,705.60 (540 decks x $7 per deck x 98%) Dr: Sales $3,780 Cr: Credit Card Expense $74.40 (540 decks x $7 per deck x 2%) To record the sale of 540 card decks to Padma Singh using MoneyPlus credit card Dr: Cost of Goods Sold $2,160 (540 decks x $4 per deck) Dr: Inventory $2,160 To record the cost of the card decks sold to Padma Singh Dr: Cash $3,631.20 (540 decks x $7 per deck x 98%) Dr: Credit Card Expense $74.40 Cr: Accounts Receivable $3,705.60 To record the receipt of payment from MoneyPlus for the sale, less credit card fees. (Chen, 2021)