Linda's Boutique has total receipts for the month of $29,295 including sales taxes. If the sales tax rate is 5%, what are Linda's cash received for the month? *

a.$27,831

b.$27,900

c.$29,295

d.None of the above

A company receives $174, of which $14 is for sales tax. The journal entry to record the sale would include a *

a.Debit to Sales Tax Expense for $14

b.Debit to Sales for $174

c.Debit to Cash for $174

d.None of the above

Sales taxes remitted to the government are recorded by *

a.Debiting Sales Taxes Expense

b.Crediting Sales Taxes Payable

c.Debiting Sales Taxes Payable

d.None of the above

ARE Company sells 3,000 units of its product for $500 each. The selling price includes a one year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $150 per unit. In the year of sale, warranty contracts are honored on 40 units. What amount should ARE Company accrue on December 31 for estimated warranty costs? *

a.$3,000

b.$2,000

c.$1,000

d.None of the above