Dextra Computing sells merchandise for $17,000 cash on September 30 (cost of merchandise is $11,900). The sales tax law requires Dextra to collect 3% sales tax on every dollar of merchandise sold. Record the entry for the $17,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 3% tax on this sale to the state government on October 15.

Question

Howard Harris

Business

31 May, 15:34

Dextra Computing sells merchandise for $17,000 cash on September 30 (cost of merchandise is $11,900). The sales tax law requires Dextra to collect 3% sales tax on every dollar of merchandise sold. Record the entry for the $17,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 3% tax on this sale to the state government on October 15.

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Hanna Tanner · Answer 1

Journal entries

Explanation:

1. Cash $17,510

To Sales revenue $17,000

To Sales tax payable $510 ($17,000 * 3%)

(Being the sale is recorded)

2. Cost of goods sold $11,900

To Merchandise inventory $11,900

(Being the cost of merchandise is recorded)

3. Sales tax payable $510

To Cash $510

(Being the payment is recorded)