Question
During the month of August, Goldway Inc. had cash sales of $265,000 and credit sales of $153,700, both of which include the 6% sales tax
During the month of August, Goldway Inc. had cash sales of $265,000 and credit sales of $153,700, both of which include the 6% sales tax that must be remitted to the government by September 15. Which of the following is/are TRUE? (The answer may have both above)
a. The adjusting entry of the sales tax at August 31st will be debiting to Sales Revenue and crediting to Sales Taxes Payable.
b. If the 6% tax was a VAT rather than a sales tax, the adjusting entry at August 31st will be the same as that of sales tax.
c. The amount of sales tax is $25,122.
d. Goldway Inc. should recognize the sales taxes expense for the amount of $237,000 at August 31st.
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