Question

During December, Far West Services makes a $3,600 credit sale. The state sales tax rate is...

During December, Far West Services makes a $3,600 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.5%. (Note: the sales tax amount is in addition to the credit sale amount.)

a) Record sales and sales tax payable.

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Far West Services Amount $
Credit sales 3,600.00
Sales tax @ 6%      216.00
Local tax @ 2.5%        90.00
Journal Entry
Account Debit $ Credit $
Accounts Receivable 3,906.00
Sales 3,600.00
Sales tax      216.00
Local tax        90.00
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