Question

Exercise 13-05

During the month of June, Teal Boutique recorded cash sales of $248,850 and credit sales of $179,655, both of which include the 5% sales tax that must be remitted to the state by July 15.

Prepare the adjusting entry that should be recorded to fairly present the June 30 financial statements. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
June 30	enter an account title for the adjusting entry on June 30	enter a debit amount	enter a credit amount
	enter an account title for the adjusting entry on June 30	enter a debit amount	enter a credit amount

Answer 1

In the Books Teal Boutique Journal Entries

On Cash Sales

On June

Journal Entries for Sales recorded

Account Title    ($) Debit   ($) Credit

Cash A/c Dr. 248850

To Sales 237000

To Sales Tax Payable 11850 ($ 248850*5/105)

July 15

Payment of Sales tax Liability to State

Account Title    ($) Debit   ($) Credit

Sales Tax Payable 11850

To Cash A/c 11850

Journal Entries for Sales recorded

On Credit Sales

On June

Account Title    ($) Debit   ($) Credit

Sundry Debtor Dr. 179655

To Sales 171100

To Sales Tax Payable 8555 ($ 179655*5/105)

July 15

Payment of Sales tax Liability to State

Account Title    ($) Debit   ($) Credit

Sales Tax Payable 8555

To Cash A/c 8555