The Olde English China Shop sells china, stemware, and other gift items. 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 3 percent fee. American Express charges a 4 percent fee. The Olde English China Shop also grants trade discounts to certain wholesale customers who place large orders. These orders are not subject to sales tax. During June 20X1, The Olde English China Shop engaged in the following transactions:

INSTRUCTIONS
1. Open the general ledger accounts indicated below and enter the balances as of June 1, 20X1.
2. Record the transactions in a general journal. Use 15 as the journal page number.
3. Post the entries from the general journal to the appropriate accounts in the general ledger.

GENERAL LEDGER ACCOUNTS

Analyze: 

What was the total credit card expense incurred in June?

Transcribed Image Text:

DATE 20X1 June 1 15 15 16 16 17 19 TRANSACTIONS Sold crystal goods to Sonoma Country Kitchens, a wholesale customer. The list price is $9,000, with a 20 percent trade discount. This sale is not subject to sales tax. Issued Invoice 6920 with terms of n/15. Recorded cash sales for the period from June 1 to June 15 of $10,200 plus sales tax of $816. Recorded sales for the period from June 1 to June 15 to customers using bank credit cards of $14,200 plus sales tax of $1,136. (Record the 3 percent credit card expense at this time.) Received a check from Sonoma Country Kitchens in payment of Invoice 6920 dated June 1. Sold merchandise to customers using American Express for $9,000 plus sales tax of $720. Sold a case of brass serving trays to Victorian Decadence, a wholesale customer. The list price is $18,000, with a 40 percent trade discount. This sale is not subject to sales tax. Issued Invoice 6921 with terms of n/15. Received payment from American Express for the amount billed on June 16, less a 4 percent credit card expense.