Question

Royal Gift Shop sells cards, supplies, and various holiday greeting cards. Sales to retail customers are subject to an 8 percent sales tax. The firm sells its merchandise for cash; to customers using bank credit cards, such as MasterCard and Visa; and to customers using American Express. The bank credit cards charge a 1 percent fee. American Express charges a 2 percent fee. Royal Gift Shop also grants trade discounts to certain wholesale customers who place large orders. These orders are not subject to sales tax. During February 2019, Royal Gift Shop engaged in the following transactions: DATE TRANSACTIONS 2019 Feb. 1 Sold crystal goods to Lovely Kitchens, a wholesale customer. The list price is $4,700, with a 30 percent trade discount. This sale is not subject to sales tax. Issued Invoice 5950 with terms of n/15. 15 Recorded cash sales for the period from February 1 to February 15 of $9,200 plus sales tax of $ 736. 15 Recorded sales for the period from February 1 to February 15 to customers using bank credit cards of $12,700 plus sales tax of $1,016. (Record the 1 percent credit card expense at this time. ) 16 Received a check from Lovely Kitchens in payment of Invoice 5950 dated February 1. 16 Sold merchandise to customers using American Express for $8,700 plus sales tax of $696. 17 Sold a set of Roman statues to Beautiful Bedrooms, a wholesale customer. The list price is $8,700, with a 20 percent trade discount. This sale is not subject to sales tax. Issued Invoice 5951 with terms of n/15. Received payment from American Express for the amount billed on ruary 16, less a 2 percent credit card expense. 27 Received a check from Beautiful Bedrooms in payment of Invoice 5951 dated February 17. 28 Recorded cash sales for the period from February 16 to February 28 of $7,600 plus sales tax of $608. Recorded sales for the period from February 16 to February 28 to customers using bank credit cards of $15,000 plus sales tax of $1,200. (Record the 1 percent credit card expense at this time. ) 28 Sold merchandise to customers using American Express for $9,900 plus sales tax of $792.

Need help please asap.

Answer 1

1. Recording of Journals :

Date	Account Title	Debit	Credit
01 February 2019	Accounts Receivable Dr.	3290
	To Sales		3290
	(Being sold crystal goods to Lovely Kitchens.- Invoice:5950)
15 February 2019	Cash Dr.	9936
	To Sales		9200
	To Sales Tax payable		736
	(Being Cash Sales from 01/02 to 15/02)
15 February 2019	Receivable from Credit Card Dr	13716
	To Sales		12700
	To Sales Tax payable		1016
	(Being Credit Card sales from 01/02 to 15/02)
	Credit Card Expense Dr	137.16
	To Receivable from Credit Card		137.16
	(Being Credit card expense from 01/02 to 15/02 @1%)
	Cash Dr	13578.84
	To Receivable from Credit Card		13578.84
	(Being received net amount receivable from Credit Card Companies.)
16 February 2019	Cash Dr	3290
	To accounts Receivable		3290
	(Being Cheque received from Lovely Kitchens)
16 February 2019	Receivable fromAmerican Express Dr	9396
	To Sales		8700
	To Sales Tax payable		696
	(Being merchandise sold through American Express card.)
17 February 2019	Accounts Receivable Dr.	6960
	To Sales		6960
	(Being sold Roman Statues to Beautiful Bedrooms.- Invoice:5951)
20 February 2019	Cash Dr	9208.08
	American Express Credit card expense	187.92
	To Receivable fromAmerican Express		9396
	(Being American Express Credit card expense @2%)
27 February 2019	Cash Dr	6960
	To accounts Receivable		6960
	(Being Cheque received from Beautiful Bedrooms)
28 February 2019	Cash Dr.	8208
	To Sales		7600
	To Sales Tax payable		608
	(Being Cash Sales from 16/02 to 28/02)
28 February 2019	Receivable from Credit Card Dr	16200
	To Sales		15000
	To Sales Tax payable		1200
	(Being Credit Card sales from 16/02 to 28/02)
	Credit Card Expense Dr	162
	To Receivable from Credit Card		162
	(Being Credit card expense from 16/02 to 28/02 @1%)
	Cash Dr	16038
	To Receivable from Credit Card		16038
	(Being received net amount receivable from Credit Card Companies.)
28 February 2019	Receivable fromAmerican Express Dr	10692
	To Sales		9900
	To Sales Tax payable		792
	(Being merchandise sold through American Express card.)

2. Posting of entries to Ledgers :

Cash		Account No. 101			Accounts Receivable		Account No. 121
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
01-Feb	22930	0	22930		01-Feb	3290	0	3290
15-Feb	9936	0	32866		16-Feb	0	3290	0
15-Feb	13578.84	0	46444.84		17-Feb	6960	0	6960
16-Feb	3290	0	49734.84		27-Feb	0	6960	0
20-Feb	9208.08	0	58942.92
27-Feb	6960	0	65902.92
28-Feb	8208	0	74110.92
28-Feb	16038	0	90148.92
Sales Tax Payable		Account No. 222			Sales		Account No. 401
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
15-Feb	0	736	736		01-Feb	0	3290	3290
15-Feb	0	1016	1752		15-Feb	0	9200	12490
16-Feb	0	696	2448		15-Feb	0	12700	25190
28-Feb	0	1200	3648		16-Feb	0	8700	33890
28-Feb	0	792	4440		17-Feb	0	6960	40850
					28-Feb	0	15000	55850
					28-Feb	0	9900	65750
Credit card Expense		Account No. 521
Date	Debit	Credit	Balance
15-Feb	137.16	0	137.16
20-Feb	187.92	0	325.08
28-Feb	162	0	487.08

3. Total Credit card expense incurred in February :

Credit card expense as per ledger = 487.08

+ Expense for sales through American Express card on 28/02 = 10692*2%=213.84

Total Credit card Expense = 487.08 + 213.84 = $700.92

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