During August, Hill Sales Company had these summary transactions:

1.	Cash sales of $250,000, subject to sales taxes of 6%.
2.	Sales on account of $260,000, subject to sales taxes of 6%.
3.	Paid the sales taxes to the state.

Required:Prepare journal entries to record Hill Sales Company transactions on August 31. Additional Instruction

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PAGE 9

GENERAL JOURNAL

Score: 74/100

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1		Cash
2		Sales Revenue			250000
3		Sales Taxes Payable			15000
4		Accounts Receivable
5		Sales Revenue			260000
6		Sales Taxes Payable
7		Sales Taxes Payable
8		Cash

Points:

14.06 / 19

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A seller must collect sales tax from the customer and pay the amountusually on a monthly basisto the proper governmental authority. Therefore, the amount is not part of revenues and you should record it as a current liability. Later, when the seller files the sales tax return and pays the tax to the governmental agency, you should eliminate the current liability.

Prepare journal entries to record the preceding transactions.