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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%鈥塖补濒别蝉迟补虫辫补测产濒别=谤补迟别脳inventory=鈥�4100脳$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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Lily Carter works for JDK all year and earns a monthly salary of \(12,100. There is no overtime pay. Lily鈥檚 income tax withholding rate is 10% of gross pay. In addition to payroll taxes, Lily elects to contribute 5% monthly to United Way. JDK also deducts \)250 monthly for co-payment of the health insurance premium. As of September 30, Lily had $108,900 of cumulative earnings. Requirements

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