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Horngren'S Financial And Managerial Accounting
Found in: Page 578

Short Answer

On August 10, Swanson Company recorded sales of merchandise inventory on account, $4,000. The sales were subject to sales tax of 4%. The company uses the perpetual inventory system. On September 30, Swanson paid $500 of sales tax to the state.

1. Journalize the transaction to record the sale on August 10. Ignore cost of goods sold.

Sales tax payable will be debited with $160.

See the step by step solution

Step by Step Solution

Sales tax payable

Journal entries

Date

Particulars

Debit

Credit

Augast 10,

Cash

$4,160

Sales revenue

$4,000

Sales tax payble 4%

$160

(Being entry for cash sales and tax payable)

Sept, 30

Sales tax payble

$160

Cash

$160

(To record cash payement for tax payable)

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