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

Short Answer

On July 5, Williams Company recorded sales of merchandise inventory on account, $55,000. The sales were subject to sales tax of 4%. On August 15, Williams Company paid the sales tax owed to the state from the July 5 transaction. Requirements 1. Journalize the transaction to record the sale on July 5. Ignore cost of goods sold. 2. Journalize the transaction to record the payment of sales tax to the state on August 15.

  1. Total accounts receivables will be debited by $57,200
  2. The sales tax payable is debited with $2,200
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Step by Step Solution

Types of Merchandise inventory

First-in-first-out, last-in-first-out, and weighted average are the three various inventory procedures that a merchandiser might use to track their market.

journal Entries

Date

Particulars

Debit

Credit

July, 5

Account receivables

$57,200

Sales revenue

$55,000

Sales tax payable

$2,200

(To record Account receivable and the related sales tax)

August, 15

Sales tax payable

$2,200

Account payable

$2,200

(To record account payable for sales tax.)

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