Accounting major Earl Washington has an on-campus business assembling and delivering care packages to freshman students....

Transcribed Image Text:

Accounting major Earl Washington has an on-campus business assembling and delivering "care packages" to freshman students. Earl accepts cash and two major credit cards: Big Bank and Plastic Fantastic, from parents who order the packages. Big Bank deducts a 5% service charge on all sales and deposits the money into the checking accounts of its customers as soon as the credit card receipts are received. Earl deposits Big Bank receipts daily. Plastic Fantastic deducts a 3% service charge on all sales. They usually take about 10 days to pay once the credit card receipts are received. Earl deposits Plastic Fantastic receipts weekly. The following transactions were completed during September. 1-Sep: Made 670(thathadcost450) of sales to parents who used the Big Bank card. 2-Sep: Cash sales for the day amounted to 256(thathadcost 175). 5-Sep: Made 1290(thathadcost850) of sales to parents who use the Plastic Fantastic card. 6-Sep: Made another 2050(thathadcont1425) of sales to parents who used the Plastic Fantastic card. 7-Sep: Submitted Plastic Fantastic card receipts to the credit card company for payment. 10-Sep: Made 1440(thathadcost 1020) of sales to parents who use the Big Bank card. 17-Sep: Received the amount due from Plastic Fantastic. Required: Prepare journal entries to record the preceding transactions and events (company uses the perpetual inventory system). Accounting major Earl Washington has an on-campus business assembling and delivering "care packages" to freshman students. Earl accepts cash and two major credit cards: Big Bank and Plastic Fantastic, from parents who order the packages. Big Bank deducts a 5% service charge on all sales and deposits the money into the checking accounts of its customers as soon as the credit card receipts are received. Earl deposits Big Bank receipts daily. Plastic Fantastic deducts a 3% service charge on all sales. They usually take about 10 days to pay once the credit card receipts are received. Earl deposits Plastic Fantastic receipts weekly. The following transactions were completed during September. 1-Sep: Made 670(thathadcost450) of sales to parents who used the Big Bank card. 2-Sep: Cash sales for the day amounted to 256(thathadcost 175). 5-Sep: Made 1290(thathadcost850) of sales to parents who use the Plastic Fantastic card. 6-Sep: Made another 2050(thathadcont1425) of sales to parents who used the Plastic Fantastic card. 7-Sep: Submitted Plastic Fantastic card receipts to the credit card company for payment. 10-Sep: Made 1440(thathadcost 1020) of sales to parents who use the Big Bank card. 17-Sep: Received the amount due from Plastic Fantastic. Required: Prepare journal entries to record the preceding transactions and events (company uses the perpetual inventory system).

Answer rating: 100% (QA)

To record the transactions and events for Earl Washingtons business youll need to make journal entri... View the full answer