Question

Brief Exercise 10-3 Greenspan Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $17,820. All sales are subject to a 8% sales tax. Compute sales taxes payable. Sales taxes payable $ Make the entry to record sales taxes payable and sales. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Mar. 16 Cash Sales Revenue Sales Taxes Payable

Answer 1

Given that,

Sales tax rate is 8%

Ans register shows total sales = $17,820

Sales of $17,820 is inclusive of sales tax.

Sales tax payable = $17,820 - [$17,820 * 100 / (100 + 8) = $17,820 * 100 / 108]

Sales tax payable = $17,820 - $16,500

Sales tax payable = $1,320

Sales revenue = $17,820 - $1,320 = $16,500

Journal entry

Date	Account Titles and Explanation	Debit	Credit
March-16	Cash	$17,820
	Sales revenue		$16,500
	Sales tax payable		$1,320