Question

1. On July 15, Piper Co. sold $10,000 of merchandise (costing $5,000) for cash. The sales tax rate is 4%. On August 1, Piper sent the sales tax collected from the sale to the government. Record entries for the July 15 and August 1 transactions.
2. On November 3, the Milwaukee Bucks sold a six game pack of advance tickets for $300 cash. On November 20, the Bucks played the first game of the six game pack (this represented one-sixth of the advance ticket sales). Record the entries for the November 3 and November 20 transactions.

Answer 1

1)
Date	Accounts Titles and Explanations	Debit (in $)	Credit (in $)
July - 15	Cash - Bal. Fig.	$ 10,400
	Sales		$ 10,000
	Sales tax payable          ( $ 10,000 x 4% )		$ 400
	(To record the sales)
July - 15	Cost of goods sold	$ 5,000
	Maerchandise Inventory		$ 5,000
	(To record the cost of goods sold)
August - 1	Sales tax payable          ( $ 10,000 x 4% )	$ 400
	Cash		$ 400
2)
Date	Accounts Titles and Explanations	Debit (in $)	Credit (in $)
November - 3	Cash	$ 300
	Unearned ticket revenue		$ 300
	(To record the revenue)
November - 20	Unearned ticket revenue ($ 300 x 1/ 6)	$ 50
	Ticket revenue		$ 50