Question

The following transactions took place at Five Flags Amusement Park during May. Five Flags Amusement Park must charge 8 percent sales tax on all sales: DATE TRANSACTIONS 2019 May 1 Sold merchandise on account to Bill Gomez; issued Sales Slip 1015 for $1,200 plus 8 percent sales tax, terms n/30. 15 Recorded cash sales, $5,800 plus 8 percent sales tax. 31 Received payment on account due from Bill Gomez for the sale on May 1

Journalize the following entries:

1. Sold merchandise on account to Bill Gomez; issued Sales Slip 1015 for $1,200 plus 8 percent sales tax, terms n/30.

2. Recorded cash sales, $5,800 plus 8 percent sales tax.

3. Received payment on account due from Bill Gomez for the sale on May 1.

Answer 1

Journal Entries

Credit ($) Debit ($) $1,296 Date Particulars 1-May-19 Accounts Receivable Merchandise Sales Sales Tax Payable (Sales on account to Bill Gomez Sales Slip 1015) $1,200 $96 $6,264 15-May-19 Cash Merchandise Sales Sales Tax Payable (cash sales, $5,800 plus 8 percent sales tax.) $5,800 $464 $1,296 $1,296 31-May-19 Cash To Accounts Receivable (Received payment on account due from Bill Gomez against sales slip 1015)

Calculation of Sales Tax Payable

1 May = 1200 X 8/100

= 96

15 May = 5800 X 8/100

= 464