Answer:
April 10: Carla Vista Co.
Debit Cash $27,825.2
Credit Sales revenue $26,500
Credit Sales tax payable $1,325. 2
<em>(To record sales transactions and related tax)</em>
April 15: Wildhorse Co.
Debit Cash $18,550
Credit Sales revenue $17,500
Credit Sales tax payable $1,050
<em>(To record sales transactions and related tax)</em>
Explanation:
The sales tax is a certain percentage of the sales revenue. The tax is meant to be remitted to the government before a certain deadline based on the tax jurisdiction.
On Wildhorse Co., the sales tax payable of 6% was calculated by:
106% of Sales revenue = $18,550;
106%X = $18,550
X = Sales revenue = $18,550/106%
Sales revenue = $17,500
Sales tax payable = $18,550 - $17,500 = $1,050
