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18 April, 11:49

Merchandise is sold for cash. The selling price of the merchandise is $3,200 and the sale is subject to a 5% state sales tax. The journal entry to record the sale would include a credit to a. Cash for $3,200 b. Sales for $3,360 c. Sales Tax Payable for $160 d. Sales for $3,040

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  1. 18 April, 11:53
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    Option (c) is correct.

    Explanation:

    Given that,

    Selling price of the merchandise = 3,200

    State sales tax = 5%

    Sales tax payable:

    = Sales revenue x Sales tax rate

    = $3,200 * 5%

    = $160

    Therefore, the journal entry is as follows:

    Cash A/c Dr. $3,360

    To sales $3,200

    To sales tax $160

    (To record the sale)
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