Question

In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales.1. Cerviq Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $22,000 and sales taxes $1,100.2. Quartz Company does not segregate sales and sales taxes. Its register total for April 15 is $13,780, which includes a 6% sales tax.Prepare the entry to record the sales transactions and related taxes for Cerviq Company.
Prepare the entry to record the sales transactions and related taxes for Quartz Company.

Answer 1

Answer:

The entry to record the sales transactions and related taxes for Quartz Company would be as follows:

                Debit         Credit

Cash        $23,100

Sales                             $22,000

Sales taxes                   $1,100

Cash      $13,780

Sales                        $13,000

Sales taxes                $780

Explanation:

In order to prepare the entry to record the sales transactions for Quartz Company we would have to make the following calculation:

According to the given data On April 10, the register totals are sales $22,000 and sales taxes $1,100, hence, cash=$22,000 +$1,100=$23,100

Therefore, the entry to record the sales transactions for Quartz Company would be as follows:

       

                  Debit         Credit

Cash        $23,100

Sales                             $22,000

Sales taxes                   $1,100

In April 15 the cash is $13,780, which includes a 6% sales tax, therefore, the sales would be calculated as follows:

sales=$13,780/6%

sales=$13,000

hence, sales taxes=$780

The entry to record the sales transactions and related taxes for Quartz Company would be as follows:

Cash      $13,780

Sales                        $13,000

Sales taxes                $780