d. 30.4 (9) Simonic Retailers accepted $80,000 of Citibank Visa credit card char

Question

d. 30.4 (9) Simonic Retailers accepted $80,000 of Citibank Visa credit card charges for merchandise sold on July . Citibank charges 4% for it credit card use. The entry to record this transaction by Simonic Retailers will include a credit to Sales Revenue of $80,000 and a debit(s) to Cash $76,800 and Service Charge Expense S3,200. b. a. Accounts Receivable $76,800 and Service Charge Expense S3,200. c. Cash S76,800 and Interest Expense $3,200. d. Accounts Receivable $80,000. (10) Gipson Furniture factors $700,000 of receivables to Kwik Factors, Inc. Kwik Factors assesses a 3% service charge on the amount of receivables sold. Gipson Furniture factors its receivables regularly with Kwik Factors. What journal entry does Gipson make when factoring these receivables? a. Cash 679,000 Loss on Sale of Receivables 21,000 679,000 500,000 700,000 679,000 679,000 Accounts Receivable b. Cash Accounts Receivable c. Cash Accounts Receivable Gain on Sale of Receivables 21,000 d. Cash 679,000 Service Charge Expense 21,000 Accounts Receivable 700,000

Explanation / Answer

Q9 Answer is A. Cash Account $ 76,800 and Service charge expense $ 3200 Explanation: As credit card has been accepted, the payment has been realised: Total amout due 80000 Credit card charges 4% Service charge expense 3,200 Cash realised 76,800 Q10. Answer is D. Cash Dr $ 679,000; Service charges expense Dr. $21,000 and Accounts receivable Cr. $ 700,000 Explanation: For Service charges is 3%, thte amount of service charges is $21000 (i.e. $ 700,000*3%). For cash realised = 700,000-21000= 679,000

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.