Question

22. Van Morrison sells inventory for $200,000 and collects $212,000 from the customer, which includes 6% sales tax. How much revenue does Morrison record for the sale?

Answer 1

Notes:
		Sells inventory	$2,00,000
		Collect from the customer	$2,12,000
		Sales collection from the customer is inclusible of 6% sales tax
		So Sales tax = $ 212,000 X 6 / 106 =	$                    12,000
		Journal entry of the same is passed as below,
SOLUTION :
		Account Title and explanation	Debit	Credit
		Cash/ Account Receivable	$2,12,000
		Sales Revenue		$2,00,000
		Sales Tax Payable		$12,000
		(To recorded the sale revenue)
		As per above explaination,
		Sales revenue will be recorded for $ 200,000
		Answer = $ 200,000