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Chapter 11: Q14E (page 607)

Consider the following transactions of Sapphire Software: Mar. 31 Recorded cash sales of $230,000, plus sales tax of 7% collected for the state of New Jersey. Apr. 6 Sent March sales tax to the state. Journalize the transactions for the company. Ignore cost of goods sold.

Short Answer

Expert verified
  • Cash is debited with $246,100. Sales revenue and tax payable credited with $230,000 and $16,100.
  • Sales tax payable debited with $16,100 and cash is credited with $16,100.

Step by step solution

01

Calculation of sales tax

SalesTaxPayable=Sales脳TaxRate=$230,000脳7%=$16,100

02

Journal entry:

Date

Accounts and explanation

Debit

Credit

March 31

Cash

$246,100

Sales revenue

$230,000

Sales tax payable

$16,100

(To record cash sales and sales tax. payable)

April 6

Sales tax payable

$16,100

Cash

$16,100

(To record cash payment for sales tax payable.)

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