Question

On July​ 5,GuntherGunther Company recorded sales of merchandise inventory on​ account,$65,000. The sales were subject to sales tax of 4%. On August​ 15, Gunther Company paid $2,350 of sales tax to the state.

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

Answer 1

1 .Journalize the transaction to record the sale on July 5. Ignore cost of goods sold.

Account Debit Credit

Accounts Receivable $65,000

Sales Revenue $65,000

Sales Tax Payable $2,600 (65,000 x 4%)

2. Journalize the transaction to record the payment of sales tax to the state

Account Debit Credit

Cash $2,350

Sales Tax Payable $2,350

The ending balance on the sales tax payable account is $250