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4 November, 14:10

During the month of June, Rowling Boutique had cash sales of$233,200 and credit sales of $153,700, both of which include the 6%sales tax that must be remitted to the state by July 15.

Instructions

Prepare the adjusting entry that should be recorded to fairlypresent the June 30 financial statements.

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Answers (1)
  1. 4 November, 14:30
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    Cash sales = $233,200 * (100 : 106)

    = $220,000

    Credit sales = $153,700 * (100 : 106)

    = $145,000

    Sales tax revenue = ($220,000 + $145,000) * 6%

    = $21,900

    Therefore, the Journal is as follows:

    Sales tax revenue A/c Dr. $21,900

    To sales tax payable $21,900

    (To record the sales tax payable)
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