Newman Stores Accepts Both Its Own and National Credit Cards

question 186

Essay

Newman Stores accepts both its own and national credit cards. During the year the following selected summary transactions occurred.
Jan. 15 Made Newman credit card sales totaling $27,000. (There were no balances prior to January 15.)
20 Made Visa credit card sales (service charge fee 2%) totaling $7,500.
Feb. 10 Collected $12,000 on Newman credit card sales.
15 Added finance charges of 1% to Newman credit card balance.
Instructions
(a) Journalize the transactions for Newman Stores.
(b) Indicate the statement presentation of the financing charges and the credit card service charge expense for Newman Stores.

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Definitions:

Decision Tree Analysis

A tool used in decision making to visually map out possible outcomes of a decision, factoring in probabilities and costs or benefits.

NPV Distribution

Refers to the distribution of net present values across different potential investments or projects.

Conditional Probability

The probability of one event occurring with some relationship to one or more other events.

Real Option

A choice available to companies involving business decisions on investments, which use the concept of option valuation in financial markets.