Question

Dextra Computing sells merchandise for $20,000 cash on September 30 (cost of merchandise is $12,000). The sales tax law requires Dextra to collect 9% sales tax on every dollar of merchandise sold. Record the entry for the $20,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 9% tax on this sale to the state government on October 15.

Answer 1

Answer and Explanation:

According to the scenario,journal entry of the given data are as follow:-

Journal Entry

30 Sept    Cash A/c Dr. $21,800

                To Sales A/c  $20,000

  To Sales tax payable A/c $1,800          (20,000 × 9%)

                 ( Being cash sales is recorded)

30 Sept  Cost of goods sold A/c Dr. $12,000

  To Inventory A/c $12,000

               ( Being September 30th sale cost is recorded)

15 Oct  Sales tax payable A/c Dr. $1,800

     To Cash A/c  $1,800

         ( Being payment of tax is recorded)