Dextra Computing sells merchandise for $20,000 cash on September 30 (cost of merchandise is $12,000). The sales tax law requires Dextra to collect 9% sales tax on every dollar of merchandise sold. Record the entry for the $20,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 9% tax on this sale to the state government on October 15.

Question

Business

Adam

5 March, 06:43

Dextra Computing sells merchandise for $20,000 cash on September 30 (cost of merchandise is $12,000). The sales tax law requires Dextra to collect 9% sales tax on every dollar of merchandise sold. Record the entry for the $20,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 9% tax on this sale to the state government on October 15.

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Justice Valenzuela · Answer 1

Answer and Explanation:

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

Journal Entry

30 Sept Cash A/c Dr. $21,800

To Sales A/c $20,000

To Sales tax payable A/c $1,800 (20,000 * 9%)

(Being cash sales is recorded)

30 Sept Cost of goods sold A/c Dr. $12,000

To Inventory A/c $12,000

(Being September 30th sale cost is recorded)

15 Oct Sales tax payable A/c Dr. $1,800

To Cash A/c $1,800

(Being payment of tax is recorded)