Question

Sales Tax Transactions Journalize the entries to record the following selected transactions: a. Sold $62,800 of merchandise on account, subject to a sales tax of 5%. The cost of the merchandise sold was $37,500. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

Answer:

Dr Account receivable $65,940

Cr Sales Revenue $62,800

Cr Sales tax payable $3,140

Explanation:

Sales of merchandise inventory on account

Dr Account receivable $65,940

Cr Sales Revenue $62,800

Cr Sales tax payable $3,140

Sales tax payable = Sales Revenue × Sales tax percentage

$62,800×5%

=$3,140

Amount of account receivable

Account receivable = Sales Revenue + Sales tax payable

$62,800+ $3,140

=$65,940