Sales and Excise Taxes

E3B. Wall Design Services billed its customers a total of $490,200 for the month of

August, including 9 percent federal excise tax and 5 percent sales tax.

1. Determine the proper amount of service revenue to report for the month.

2. Prepare a journal entry to record the revenue and related liabilities for the month.

1. Amount of service revenue determined

Service revenue for the month:

=

2. Entry in journal form prepared

Aug.

31

x

/

100

=

x

/

100

=