Sales Tax Transactions Illustrate the effects on the accounts and financial statements of recording the following selected transactions. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases, cash outflows, and the cost of merchandise sold as negative amounts. 2. a 6. a. Sold 522,500 of merchandise on account, terms n/30, subject to a sales tax of 6%. The cost of the merchandise sold was $13,500. Balance Sheet Assets Liabilities Stockholders' Equity Accounts Receivable - + Inventory = Sales Tax Payable + Retained Earnings 23,850 -13,500 1,350 9,000 + Statement of Cash Flows Income Statement No effect 0 Sales - 22,500 Cost of goods sold -13,500 Gross profit 9,000 b. Paid sales tax to the state sales tax department for taxes collected on the preceding sale. Balance Sheet Assets = Liabilities + Stockholders' Equity Cash + No Effect = Sales Tax Payable No Effect 36,000 X 0 1,350 X 0 0 Statement of Cash Flows Income Statement Operating 36,000 X No effect