Question

Sales Tax Transactions Journalize the entries to record the following selected transactions. a. Sold $544,000 of merchandise on account, subject to a sales tax of 8%. The cost of the goods sold was $320,960. If an amount box does not require an entry, leave it blank. b. Paid $41,330 to the state sales tax department for taxes collected If an amount box does not require an entry, leave it blank. BE

Answer 1

Credit Debit $587,520 a. Particulars Accounts receivable A/C($544,000+8%*$544,000) Sales revenue A/C Sales tax payable A/C($544,000*8%) (To record sales revenue and sales tax) $544,000 $43,520 $320,960 Cost of goods sold A/C Inventory A/C (To record cost of goods sold) $320,960 b. $41,330 Sales tax payable A/C Cash A/C (Being sales tax paid to the sales tax department) $41,330