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7 December, 16:23

Sales Tax Transactions Journalize the entries to record the following selected transactions: a. Sold $62,800 of merchandise on account, subject to a sales tax of 5%. The cost of the merchandise sold was $37,500. For a compound transaction, if an amount box does not require an entry, leave it blank.

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  1. 7 December, 16:28
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    Dr Account receivable $65,940

    Cr Sales Revenue $62,800

    Cr Sales tax payable $3,140

    Explanation:

    Sales of merchandise inventory on account

    Dr Account receivable $65,940

    Cr Sales Revenue $62,800

    Cr Sales tax payable $3,140

    Sales tax payable = Sales Revenue * Sales tax percentage

    $62,800*5%

    =$3,140

    Amount of account receivable

    Account receivable = Sales Revenue + Sales tax payable

    $62,800 + $3,140

    =$65,940
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