Green Acres Lawn Care provided $600,000 of services to customers during Year 1. All customers paid for the services with credit cards. The company submitted the credit card receipts to the credit card company immediately, and the credit card company paid cash in the amount of face value less a 4 percent service charge.Required:Record the (1) credit card sales and (2) collection of the receivables in the horizontal statements model, below. Show dollar amounts of increases and decreases. For cash flows, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element is not affected by an event.
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What will be an ideal response?
(1) The credit card sale increases total assets (accounts receivable-credit card company) by $567,000 [or $600,000 - ($600,000 × 4%)]. It increases revenue by $600,000 and increases expenses (credit card expense) by $24,000 (or $600,000 × 4%).
(2) The collection from the credit card company increases assets (cash) by $576,000 and decrease assets (accounts receivable-credit card company) by the same amount.
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On January 1, 2016, Reynolda Co leased equipment by signing a five-year lease that required five payments of $30,000 due on January 1 of each year with the first payment due January 1, 2016. The equipment remains the property of the lessor at the end of the lease and Reynolda does not guarantee any residual value. Using a 10% cost of capital, Reynolda capitalized the lease on January 1, 2016, in
the amount of $125,096. What is the amount of current portion of the lease obligation Reynolda should report on the December 31, 2017, balance sheet? A) $7,461 B) $20,490 C) $22,539 D) $30,000
According to Alan Davidson, an industrial psychologist, the single best predictor of an employee's future behaviour is
A. academic accomplishments. B. the individual's IQ. C. past behaviour. D. standardized test scores.
The balanced scorecard ______.
A. was introduced by the ISO B. was popular in the 1970s C. can be used to improve the firm’s internal communications D. is required by the U.S. government
Answer the following statements true (T) or false (F)
Positive accounting research attempts to be value-free, while normative accounting research is value judgment oriented.