Question

At FolktownFolktown Arts, gross sales for the month​ included:

Sales on account (3/10, n/30) $120,000

Credit Card Sales (2% credit card fee) $150,000

Requirement 1. Journalize the sales on​ account, the credit card​ sales, and the cash payments on account received during the month. ​(Use the gross method to record the sales transactions. Record debits​ first, then credits. Exclude explanations from any journal​ entries.)

First, record the sales on account.

Next, record the credit card sales.

Now, record the cash payments on account received during the month. ​(Prepare a compound entry for all cash payments on account received during the​ month.)

Requirement 2: Calculate the net sales revenue for the month.

Answer 1

Solution 1:

Journal Entries - Folktown Arts
Date	Particulars	Debit	Credit
1	Accounts receivables Dr	$120,000.00
	To Sales revenue		$120,000.00
	(To record sales on account)
2	Cash Dr	$147,000.00
	Credit card expense Dr ($150,000*2%)	$3,000.00
	To Sales revenue		$150,000.00
	(To record credit cardsales)
3	Cash Dr ($120,000*97%)	$116,400.00
	Sales Discount Dr ($120,000*3%)	$3,600.00
	To Accounts receivables		$120,000.00
	(To record collection from customer)

Note: It is assumed that cash received on account during the month is with in discount period.

Solution 2:

Net sales revenue for the month = Gross sales - Sales discount - Credit card fee

= ($120,000 + $150,000) - $3,600 - $3,000 = $263,400