Chapter 7 HW

Sold $20,000 of merchandise, which cost $15,000, on Mastercard credit cards. Mastercard charges a 5% fee.

1a Cash 19000 D credit card expense 1000 D Sales 20000 C 1b Cost of Goods Sold 15000 D 15000 C

Sold $5,000 of merchandise, which cost $3,000, on an assortment of bank credit cards. These cards charge a 4% fee.

2A Cash 4800 D credit card expense 200 D sales 5000 C 2B cost of goods sold 3000 D merchandise inventory 3000 C

Solstice Company, which uses the direct write-off method, determines on October 1 that it cannot collect $50,000 of its accounts receivable from its customer, P. Moore. On October 30, P. Moore unexpectedly pays his account in full to Solstice Company. Record Solstice's entries for recovery of this bad debt.

AR 50k D BDE 50k C C 50k D AR 50k C

Solstice Company determines on October 1 that it cannot collect $50,000 of its accounts receivable from its customer, P. Moore. Apply the direct write-off method to record this loss as of October 1.

Bad Dept Expense 50,000 D Accounts receivable 50,000 C