Question

Credit Card Sales Valderi’s Gallery sells quality art work, with prices for individual pieces ranging from $400 to $25,000. Sales are infrequent, typically only three to five pieces per week. The following transactions occurred during the first week of June 2015. Perpetual inventory is used.

On June 1, sold an $800 framed print ($500 cost) to Kerwin Antiques on account, with 2/10, n/30 credit terms.

On June 2, sold three framed etchings totaling $2,400 ($1,500 cost) to Maria Alvado, who used the United Merchants Card to charge the cost of the etchings. Valderi mailed the credit card sales slip to United Merchants the same day. United Merchants will send a check within seven days after deducting a one percent fee.

On June 4, sold a $1,900 oil painting ($1,000 cost) to Shaun Chandler, who paid with a personal check.

On June 5, sold a $2,000 watercolor ($1,500 cost) to Julie and John Malbie, who used their Great American Bank Card to charge the purchase of the painting. Valderi deposited the credit card sales slip the same day and received immediate credit in the company’s checking account. The bank charged a one percent fee.

On June 6, received payment from Kerwin Antiques for its June 1 purchase.

On June 7, received a check from United Merchants for the June 2 sale.

Required
Prepare journal entries to record the Valderi Gallery transactions.

General Journal
Date	Description	Debit	Credit
June 1	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record credit sales revenue.
June 1	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record cost of goods sold.
June 2	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	Credit Card Fee Expense	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record credit card sales.
June 2	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record cost of goods sold.
June 4	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record cash sales.
June 4	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record cost of goods sold.
June 5	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	Credit Card Fee Expense	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record credit card sales.
June 5	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record cost of goods sold.
June 6	Cash	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record collection from Kerwin Antiques.
June 7	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	AnswerAccounts Receivable - Kerwin AntiquesAccounts Receivable - United MerchantsCashCost of Goods SoldCredit Card Fee ExpenseInventorySales DiscountsSales Revenue	Answer	Answer
	To record collection from United Merchants.

Answer 1

Answer:

Date	General Journal	Debit	Credit
Jun.01	Account receivable-Kerwin Antiques	$       800
	Sales revenue		$       800
Jun.01	Cost of goods sold	500
	Inventory		500
Jun.02	Account receivable-United Merchants	2,376
	Credit card fee expense ($2,400*1%)	24
	Sales revenue		2,400
Jun.02	Cost of goods sold	1,500
	Inventory		1,500
Jun.04	Cash	1,900
	Sales revenue		1,900
Jun.04	Cost of goods sold	1,000
	Inventory		1,000
Jun.05	Cash	1,980
	Credit card fee expense ($2,000*1%)	20
	Sales revenue		2,000
Jun.05	Cost of goods sold	1,500
	Inventory		1,500
Jun.06	Cash	784
	Sales discount ($800*2%)	16
	Account receivable-Kerwin Antiques		800
Jun.07	Cash	2,376
	Account receivable-United Merchants		2,376