Ask Question
1 December, 20:11

In performing accounting services for small businesses, you encounter the following situations per taining to cash sales. 1. Poole Company enters sales and sales taxes separately in its cash register. On April 10, the register totals are sales $30,000 and sales taxes $1,500. 2. Waterman Company does not segregate sales and sales taxes. Its register total for April 15 is $25,680, which includes a 7% sales tax. Prepare the entry to record the sales transactions and related taxes for each client.

+5
Answers (1)
  1. 1 December, 23:46
    0
    Answer and Explanation:

    According to the scenario, journal entries of the given data are as follow:-

    1. Journal Entry of Poole Company

    April 10

    Cash A/c Dr. $31,500

    To Sales A/c $30,000

    To Sales tax payable A/c $1,500

    (Being the sales and sales tax payable is recorded)

    2. Since Register total for April $25,680 includes 7% sales tax.

    So Sales of Waterman Company

    = Registered Total Amount : (1 + Sales Tax Rate)

    = $25,680 : (1 + 7%)

    = $25,680 : 1.07

    = $24,000

    Now

    Sales tax = $24,000 * 7% = $1,680

    Journal Entry of Waterman Company

    On 15 April

    Cash A/c Dr. $25,680

    To Sales A/c $24,000

    To Sales tax payable A/c $1,680

    (Being the sales and sales tax payable is recorded)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “In performing accounting services for small businesses, you encounter the following situations per taining to cash sales. 1. Poole Company ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers