Dr Cash $98,000.00
Cr Sales $92,120.00
Cr sales tax payable $5,880.00
What is sales tax?
Sales tax is the portion of the sales revenue or sales price that would be paid to the government as taxes on the items sold.
In order words, the sales revenue comprises of the sales amount belonging to the seller and the other part which is the sales tax that the seller would remit to the relevant tax authority.
In this case, 6% of the amount collected from cash sales in this instance belongs to the tax authority which would be recorded as sales tax payable until it is finally paid to the tax authority.
Sales tax=$98,000*6%
Sales tax=$5880.00
sales amount=sales revenue-sales taxes
sales amount=$98000.00-$5,880.00
sales amount=$92,120.00
The appropriate journal entries would include a debit to cash account and corresponding credit entries of $92,120.00 and $5,880.00 to sales account and sales tax payable account respectively
Find out out more about sales tax on:https://brainly.com/question/9437038
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