Asked by sonia umezurike on Jun 09, 2024
Verified
Mansour Company makes sales on which an 8% sales tax is assessed.The following summary transactions were made during 2010:
a. Cash sales of $900,000 \$ 900,000 $900,000 , excluding sales taxes.
b. Credit sales of $2,150,000 \$ 2,150,000 $2,150,000 , including sales taxes
c. Sales taxes of $250,000 \$ 250,000 $250,000 were paid to the state.
Required:
Prepare journal entries to record the preceding transactions.(Round to the nearest whole number.)
Sales Tax
A tax levied by the government on the sale of goods and services.
Credit Sales
Credit sales are transactions where goods or services are provided to a customer with the agreement that payment will be made at a later date.
- Examine and compile payroll and payroll tax journal entries.
Verified Answer
MB
Mincadet BarrackJun 12, 2024
Final Answer :
a.
Cash 972,000 Sales Taxes Payable 72,000 Sales 900,000\begin{array}{lll}\text { Cash } & 972,000 & \\& \text { Sales Taxes Payable } & 72,000 \\& \text { Sales } & 900,000\end{array} Cash 972,000 Sales Taxes Payable Sales 72,000900,000
b.
Accounts Receivable 2,150,000 Sales Taxes Payable 159,259 Sales 1,990,741\begin{array}{lll}\text { Accounts Receivable } & 2,150,000 & \\& \text { Sales Taxes Payable } & 159,259 \\& \text { Sales } & 1,990,741\end{array} Accounts Receivable 2,150,000 Sales Taxes Payable Sales 159,2591,990,741
c.
Sales Tax Payable 250,000 Cash 250,000\begin{array}{lll}\text { Sales Tax Payable } &250,000 \\&\text { Cash } & 250,000\end{array} Sales Tax Payable 250,000 Cash 250,000
Cash 972,000 Sales Taxes Payable 72,000 Sales 900,000\begin{array}{lll}\text { Cash } & 972,000 & \\& \text { Sales Taxes Payable } & 72,000 \\& \text { Sales } & 900,000\end{array} Cash 972,000 Sales Taxes Payable Sales 72,000900,000
b.
Accounts Receivable 2,150,000 Sales Taxes Payable 159,259 Sales 1,990,741\begin{array}{lll}\text { Accounts Receivable } & 2,150,000 & \\& \text { Sales Taxes Payable } & 159,259 \\& \text { Sales } & 1,990,741\end{array} Accounts Receivable 2,150,000 Sales Taxes Payable Sales 159,2591,990,741
c.
Sales Tax Payable 250,000 Cash 250,000\begin{array}{lll}\text { Sales Tax Payable } &250,000 \\&\text { Cash } & 250,000\end{array} Sales Tax Payable 250,000 Cash 250,000
Learning Objectives
- Examine and compile payroll and payroll tax journal entries.