Sales Tax Transactions

Journalize the entries to record the following selected transactions.

a. Sold $8,000 of merchandise on account, subject to a sales tax of 7%. The The cost that is reported as an expense when goods is sold.cost of the goods sold was $4,720.

If an amount box does not require an entry, leave it blank.

	Accounts Receivable Accounts Receivable Cash Sales Discounts Sales Tax Expense Sales
	Sales Accounts Receivable Cash Sales Discounts Sales Tax Expense Sales
	Sales Tax Payable Accounts Payable Accounts Receivable Sales Discounts Sales Tax Expense Sales Tax Payable
	Cost of Goods Sold Accounts Payable Cash Cost of Goods Sold Inventory Sales
	Inventory Accounts Payable Accounts Receivable Cash Cost of Goods Sold Inventory

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(a) Two entries are required: (1) for the sale on account including sales tax (2) for the cost of the goods sold and inventory decrease on the seller's records.

Learning Objective 2.

b. Paid $51,240 to the state sales tax department for taxes collected.

	Sales Tax Payable Accounts Receivable Cash Sales Tax Expense Sales Tax Payable Sales
	Cash Accounts Receivable Cash Common Stock Cost of Goods Sold Sales Sales Tax Expense Sales Tax Payable