Question

In: Accounting

a. Sold $852,000 of merchandise on account, subject to a sales tax of 7%. The cost of the goods sold was $502,680.

Sales Tax Transactions

Journalize the entries to record the following selected transactions.

a. Sold $852,000 of merchandise on account, subject to a sales tax of 7%. The cost of the goods sold was $502,680.

If an amount box does not require an entry, leave it blank.


Accounts Receivable


Sales


Sales Tax Payable


Cost of Goods Sold


Inventory

b. Paid $45,520 to the state sales tax department for taxes collected.

If an amount box does not require an entry, leave it blank.


Sales Tax Payable


Cash

Solutions

Expert Solution

  • [a]

Accounts title

Debit

Credit

Accounts Receivable

$911,640

Sales

$852,000

Sales Tax Payable [$852000 x 7%]

$59,640

Cost of Goods Sold

$502,680

Inventory

$502,680

  • [b]

Accounts title

Debit

Credit

Sales tax Payable

$59,640

Cash

$59,640

ekkarill92 answered 2 years ago
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