Newman Stores Accepts Both Its Own and National Credit Cards

question 40

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 $22,000. (There were no balances prior to January 15.)
20 Made Visa credit card sales (service charge fee 2%) totaling $5,500.
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:

Sardines

Small, oily fish within the herring family of Clupeidae, often canned and eaten by humans.

Marginal Rate

Often referred to as the marginal rate of substitution or the marginal tax rate, indicating the rate at which one can trade off one good for another or the tax rate on the next dollar earned, respectively.

Substitution

Substitution refers to the economic principle where consumers replace more expensive items with less expensive ones or firms replace inputs with cheaper alternatives, in response to changes in price or availability.

Videocassette

A medium for the recording of analog audio and video tapes, now largely obsolete.