Reference no: EM132745685

Questions -

Q1. Newland Retailers accepted $80,000 of Citibank Visa credit card charges for merchandise sold on July 1. Citibank charges 4% for its credit card use. The entry to record this transaction by Newland Retailers will include a credit to Sales Revenue of $80,000 and a debit(s) to

a. Accounts Receivable $86,400 and Service Charge Expense $3,200.

b. Cash $76,800 and Interest Expense $3,200.

c. Cash $76,800 and Service Charge Expense $3,200.

d. Accounts Receivable $80,000

Q2. A company just starting in business purchased three inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $290 and used FIFO costing, the gross profit for the period would be

a. $110

b. $125

c. $100

d. $115