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6 August, 06:47

Dextra Computing sells merchandise for $20,000 cash on September 30 (cost of merchandise is $12,000). The sales tax law requires Dextra to collect 9% sales tax on every dollar of merchandise sold. Record the entry for the $20,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 9% tax on this sale to the state government on October 15.

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  1. 6 August, 06:55
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    Answer and Explanation:

    According to the scenario, journal entry of the given data are as follow:-

    Journal Entry

    30 Sept Cash A/c Dr. $21,800

    To Sales A/c $20,000

    To Sales tax payable A/c $1,800 (20,000 * 9%)

    (Being cash sales is recorded)

    30 Sept Cost of goods sold A/c Dr. $12,000

    To Inventory A/c $12,000

    (Being September 30th sale cost is recorded)

    15 Oct Sales tax payable A/c Dr. $1,800

    To Cash A/c $1,800

    (Being payment of tax is recorded)
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