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Chapter 11: 1TI (page 578)

On August 10, Swanson Company recorded sales of merchandise inventory on account, \(4,000. The sales were subject to sales tax of 4%. The company uses the perpetual inventory system. On September 30, Swanson paid \)500 of sales tax to the state.

1. Journalize the transaction to record the sale on August 10. Ignore cost of goods sold.

Short Answer

Expert verified

Sales tax payable will be debited with $160.

Step by step solution

01

Sales tax payable

4% Salestaxpayble=rate×inventory= 4100×$4,000=$160

02

Journal entries

Date

Particulars

Debit

Credit

Augast 10,

Cash

$4,160

Sales revenue

$4,000

Sales tax payble 4%

$160

(Being entry for cash sales and tax payable)

Sept, 30

Sales tax payble

$160

Cash

$160

(To record cash payement for tax payable)

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Most popular questions from this chapter

: On June 1, Hunting Man Magazine collected cash of $63,000 on future annual subscriptions starting on July 1. Requirements

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What payroll taxes is the employer responsible for paying?

Liam Wallace is general manager of Moonwalk Salons. During 2018, Wallace worked for the company all year at a \(13,400 monthly salary. He also earned a year-end bonus equal to 5% of his annual salary.

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