Answer:
1. Dec 5
Dr Cash 500
Cr Due to Customer 500
2. Dec 31
Dr Cash 798,000
Cr Sales 760,000
Cr Sales Taxes Payable 38,000
3. Dec 10
Dr Delivery truck 126,000
Cr Cash 126,000
4. Dec 31
Dr Parking lot 84,000
Cr Asset Retirement Obligation 84,000
Explanation:
Preparation of Journal entries
1. Based on the information given we were told that the store received the amount of $500 on December 5 which means that the transaction will be recorded as;
Dr Cash 500
Cr Due to Customer 500
2. Based on the information given we were told that the cash sales was the amount of $798,000 which as well include 5% sales tax which means that the transaction will be recorded as:
Dec 31
Dr Cash 798,000
Cr Sales 760,000
($798,000 / 1.05)
Cr Sales Taxes Payable 38,000
($760,000 × 5%)
3. Based on the information given we were told that three delivery trucks was purchased for the amount of $120,000 in which 5% sales tax was applied, hence the transaction will be recorded as:
Dec 10
Dr Delivery Truck 126,000
($120,000 × 1.05)
Cr Cash 126,000
4. Based on the information given we were told that the fair value at December 31 was estimated as $84,000 which means that the transaction will be recorded as:
Dec 31
Dr Parking lot 84,000
Cr Asset Retirement Obligation 84,000