Kramerica, Inc., sold 200 oil drums to Thompson Manufacturing for $100 each. In addition to the $100
Question:
Kramerica, Inc., sold 200 oil drums to Thompson Manufacturing for $100 each. In addition to the $100 sale price per drum, there is a $2 per drum federal excise tax and a 10 percent state sales tax. What journal entry should be made to record this sale?
a. Debit Accounts Receivable 20,000; debit Tax Expense 2,400; credit Federal Excise Tax Payable $400; credit State Sales Tax Payable 2,000; credit Revenue 20,000.
b. Debit Accounts Receivable 22,400; credit Federal Excise Tax Payable $400; credit State Sales Tax Payable 2,000; credit Revenue 20,000.
c. Debit Accounts Receivable 22,400; credit Revenue 22,400.
d. Debit Accounts Receivable 20,000; credit Revenue 20,000.
Step by Step Answer:
Cornerstones Of Financial Accounting Current Trends Update
ISBN: 9781111527952
1st Edition
Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen