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30 June, 13:56

Dextra Computing sells merchandise for $16,000 cash on September 30 (cost of merchandise is $11,200). Dextra collects 10% sales tax. Record the entry for the $16,000 sale and its sales tax. Also record the entry that shows Dextra sending the sales tax on this sale to the government on October 15.

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  1. 30 June, 14:25
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    See explanation section.

    Explanation:

    September 30, Cash Debit = 17,600

    Sales Credit = 16,000

    Sales taxes payable Credit = 1,600

    Calculation: Sales taxes payable = 16,000 * 10% = 1,600

    To record the sales by cash with a sales tax.

    September 30, Cost of goods sold Debit = 11,200

    Merchandise inventory Credit = 11,200

    As the company uses perpetual inventory system, therefore, the company gave cost of goods sold journal.

    October 15, Sales taxes payable Debit = 1,600

    Cash Credit = 1,600

    To record the cash payment of sales tax to government.
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