Question

Dextra Computing sells merchandise for $6,000 cash on September 30 (cost of merchandise is $3,900). Dextra collects 5% sales tax. Record the entry for the $6,000 sale and its sales tax. Also record the entry that shows Dextra sending the sales tax on this sale to the government on October 15.

Answer 1

Answer:

    Date                     General Ledger                   Dr.          Cr.

1.   September 30     Cash                                 $6,300

                                  Sales Tax Payable                           $300

                                  Sales                                                 $6,000

2.  September 30     Cost of Goods Sold        $3,900

                                  Merchandise Inventory                    $3,900

3.  October 15           Sales Tax Payable          $300

                                  Cash                                                  $300

Explanation:

Sales Tax is subject to the price of merchandise. Sales tax is collected by the business on the taxable supplies on the behalf of government and paid to the government.

Sales tax amount = 6,000 x 5% = $300

Cost of Merchandise is recorded as cost of goods sold and deducted from the merchandise inventory.