A company sold merchandise for cash on September 30th. The merchandise was sold for $12,000 and...

A company sold merchandise for cash on September 30th. The merchandise was sold for $12,000 and had a cost of $7,000. The tax rate is 5%. Show all of your work!

Record the sale:

Record the remittance of the sales taxes to the state on October 30th.

Solutions

Expert Solution

Solution:

Sales Tax Payable = Sales * tax rate
= $12,000 * 5%
= $600
Journal Entry

Date	Particulars	Debit	Credit
30-Sep	Cash	$12,600
	Sales		$12,000
	Sales Tax Payable		$600
	(Being Sale of inventory recorded)

30-Sep	Cost of goods sold	$7,000
	Merchandise Inventory		$7,000
	(Being cost of goods sold recorded)

30-Oct	Sales Tax Payable	$600
	Cash		$600
	(Being Sales tax paid to the state)

Please upvote , if found the answer useful.
For any clarification, Feel free to reach at comment Section

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Smith Company sold merchandise in the amount of $5,800 to Batter Company on September 1, with...

Smith Company sold merchandise in the amount of $5,800 to Batter Company on September 1, with credit terms of 2/10, n/30. The cost of the merchandise is $2,400. On September 4, Batter Company returns some of the merchandise, which were put back into Smith's inventory. The selling price and the cost of the returned merchandise are $800 and $500, respectively. (Assume both companies use the perpetual inventory method.) Batter Company's journal entry on September 8, when they pay the amount...

On September 3, 2017, Robin Franchises, a U.S. company, sold merchandise to a franchisee in the...

On September 3, 2017, Robin Franchises, a U.S. company, sold merchandise to a franchisee in the U.K., at a price of £8,000,000, payable in three months in pounds. To hedge its exposed asset position, on September 3, 2017, Robin entered a forward contract for delivery of £8,000,000 to the broker on December 3, 2017. On December 3, 2017, Robin received payment from the franchisee, and delivered the pounds to the broker to close the forward contract. Robin’s accounting year ends...

a. Sold merchandise for cash (cost of merchandise $152,590). $ 276,700 b. Received merchandise returned...

a. Sold merchandise for cash (cost of merchandise $152,590). $ 276,700 b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $810). 1,610 c. Sold merchandise (costing $9,450) to a customer on account with terms 2/10, n/30. 21,000 d. Collected half of the balance owed by the customer in (c) within the discount period. 10,290 e. Granted a partial allowance relating to credit sales that the customer in (c) had...

On November 30th, FRI Company’s general ledger shows a checking account balance of $12,000. The company’s cash...

On November 30th, FRI Company’s general ledger shows a checking account balance of $12,000. The company’s cash receipts for the month which haven’t cleared the bank yet are $5,500 and checks written by the company this month which have not cleared the bank total $9,000. While comparing the bank statement with the general ledger FRI determined the bank overstated a deposit the company made on November 28th for $100. The bank statement also reported service fees of $50, interest FRI earned on...

nbsp Dec. 4 Sold merchandise for $ 450 cash. The cost of merchandise was $ 350....

nbsp Dec. 4 Sold merchandise for $ 450 cash. The cost of merchandise was $ 350. 9 Purchased merchandise from Ree Co. on account, $3,300, F.O.B. shipping point (buyer pays freight); terms 22/10, n/30. Freight to be paid on December 20. 20 Paid freight on December 9 purchase, $ 110. Journalize the following transactions. Assume the perpetual inventory system. (Click the icon to view the transactions.) (Record debits first, then credits. Exclude explanations from journal entries.) December 4: Sold merchandise...

On September 31, 2054, Vault-Tec Corporation sold merchandise to a customer for $70,000. The cost of...

On September 31, 2054, Vault-Tec Corporation sold merchandise to a customer for $70,000. The cost of the merchandise was $25,000. In payment, Vault-Tec Corporation agreed to accept a 10%, 9 month note requiring the payment of interest and principal on June 30, 2055. The 10% is appropriate in this situation. Vault-Tec Corporation uses the perpetual inventory system and their year-end is December 31. Instructions: a) Prepare journal entries to record the sale of merchandise, the December 31, 2054 interest accrual,...

When the merchandise is sold by the company, what is the cost of goods sold?

Use the following information on the U.S. dollar value of the euro.Spot RateForward Rate forApril 30, 2021 DeliveryOctober 30, 2020$ 1.250$ 1.254December 31, 20201.2581.256April 30, 20211.2601.260On October 30, 2020, a U.S. company forecasts that it will purchase merchandise from an Italian supplier at the end of April 2021, in the amount of €100,000, and will pay the supplier on delivery. On October 30, the company enters a forward contract to buy €100,000 on April 30, 2021 and classifies it as...

On May 11, Gradner Company sold $30,000 of merchandise to Dionne Company, the merchandise had cost...

On May 11, Gradner Company sold $30,000 of merchandise to Dionne Company, the merchandise had cost Gradner Company $22,000. Dionne Company accepted delivery on May 12, with terms 2/10, n/30, FOB Gradner Company’s factory. When the goods were delivered, Express Shipping was paid $300 for the delivery charges on the merchandise. The next day, Dionne Company reported to Gradner that a few items were slightly dented, for which Gradner agreed to provide a credit of $1,800. On May 20, Dionne...

Journalism the entries for the following transactions: A. Sold merchandise for cash , 19489. The cost...

Journalism the entries for the following transactions: A. Sold merchandise for cash , 19489. The cost of the goods sold was 11,690. ( record the sale first) B. Sold merchandise on account 13320, the cost of the goods sold was 7,990.( récord the sale first) C. Sold merchandise to customers who used MasterCard and visa , $120,950. The cost of the goods sold 72,570. ( record the sale first) D. Sold merchandise to customers who used American Express 40,360 ....

HanLue Brothers, a manufacturing company, produces the following balances from its books at 30th September 2017:...

HanLue Brothers, a manufacturing company, produces the following balances from its books at 30th September 2017: $ Stocks at 1 October 2016: Raw materials 7,450 Work-in-progress(factory cost) 5,330 Finished goods(transfer value) 12,110 Purchases of raw materials 128,740 Purchases returns 310 Direct expenses 3,280 Return inwards 1,215 Carriage inwards 1,055 Rates 5,250 Light, heat and power 3,270 Direct Wages 187,240 Indirect Wages 14,320 Telephone 890 Factory repairs 2,215 Insurances 1,420 Factory salaries 38,000 Office salaries 24,000 Sales salaries 27,435 Plant &...

Subjects