Question

In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Oriole Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $24,500 and sales taxes $1,225. 2. Sheridan Company does not segregate sales and sales taxes. Its register total for April 15 is $16,430, which includes a 6% sales tax. Prepare the entry to record the sales transactions and related taxes for Oriole Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 10 enter an account title to record the sales transactions and related taxes for Oriole Company on April 10 Cash enter a debit amount enter a credit amount enter an account title to record the sales transactions and related taxes for Oriole Company on April 10 Sales Revenue enter a debit amount enter a credit amount enter an account title to record the sales transactions and related taxes for Oriole Company on April 10 Sales Taxes Payable enter a debit amount enter a credit amount eTextbook and Media

Answer 1

Answer and Explanation:

The journal entry to record the sales transaction is given below:

On April 10

Cash Dr $25,725

       To Sales revenue $24,500

       To Sales tax payable $1,225

(Being the sale is recorded)

Here cash is debited as it increased the assets and revenue & sales tax payable is credited as it increased the  revenue & liabilities