Question

Dextra Computing sells merchandise for $15,000 cash on September 30 (cost of merchandise is $12,000). The sales tax law requires Dextra to collect 5% sales tax on every dollar of merchandise sold. Record the entry for the $15,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 5% tax on this sale to the state government on October 15. View transaction list Journal entry worksheet Record the cost of September 30th sales. Note: Enter debits before credits Date General Journal Debit Credit Sep 30 Record entry Clear entry View general journal

Answer 1

Answer and Explanation:

The journal entries are shown below:

1. On Sep 30

Cash    $15750

   To Sales   $15,000

   To Sales taxes payable ($15000 ×5%)  $750

(Being the cash receipts is recorded)

For recording this we debited the cash as it increased the assets and credited the sales and sales tax payable as it increased the revenue and liabilities

2   On Sep 30

Cost of goods sold   $12,000

              To Merchandise inventory $12,000

(Being the cost of goods sold is recorded)

For recording this we debited the cost of goods sold as it increased the expenses and credited the merchandise inventory as it reduced the assets

3  On Oct 15

Sales taxes payable $750

      To Cash $750

(Being cash paid is recorded)

For recording this we debited the sales tax payable as it reduced the liabilities and credited the cash as it decreased the assets