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.

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)

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ekkarill92 answered 3 years ago

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