Question

On July​ 5,GuntherGunther Company recorded sales of merchandise inventory on​ account,$65,000. The sales were subject to sales tax of 4%. On August​ 15, Gunther Company paid $2,350 of sales tax to the state.

Requirements

1 .Journalize the transaction to record the sale on July 5. Ignore cost of goods sold.
2. Journalize the transaction to record the payment of sales tax to the state

Answer 1

Answer:

1 .Journalize the transaction to record the sale on July 5. Ignore cost of goods sold.

Account                              Debit              Credit

Accounts Receivable        $65,000

Sales Revenue                                           $65,000

Sales Tax Payable                                      $2,600 (65,000 x 4%)

2. Journalize the transaction to record the payment of sales tax to the state

Account                              Debit              Credit

Cash                                                           $2,350

Sales Tax Payable             $2,350

The ending balance on the sales tax payable account is $250