a. During Year 6, ECU Corporation receives $535,000 CASH from customers equal to the selling price of goods plus sales tax. / The total SALES REVENUE is equal to $500,000. The amount of the SALES TAX PAYABLE is equal to 7% of the selling price. Phrase 1st: 2nd: 3rd: Date Phrase Calculation of SALES TAX PAYABLE = 1st: 2nd: 3rd: 4th: Account Date $ Accounts Account = $ Category b. During Year 6 ECU Corporation receives $535,000 CASH from customers equal to the selling price of goods plus sales tax, / all of which is also initially recorded to SALES REVENUE. / The amount of the SALES TAX PAYABLE is equal to 7% of the selling price, / also the amount by which SALES REVENUE is reduced. Cash collected (CASH collected / (1+ sales tax rate)) - ($ / (1+ Accounts AL SE RE contra + AL SE RE contra + AL SE RE contra + Category Debit AL SE RE contra AL SE RE contra AL SE RE Affect contra AL SE RE contra Debit Affect + + + + Dr. or Cr. - Dr Cr Dr Cr Dr Cr Credit Dr. or Cr. Dr Cr Dr Cr Dr Cr Dr Cr Credit