Question

Record the following transactions of Fashion Park in a general journal. Fashion Park must charge 8 percent sales tax on all sales.


DATE
TRANSACTIONS
2019

April
2
Sold merchandise for cash, $2,500 plus sales tax.

3
The customer purchasing merchandise for cash on April 2 returned $250 of the merchandise; provided a cash refund to the customer.

4
Sold merchandise on credit to Jordan Clark; issued Sales Slip 908 for $1,050 plus tax, terms n/30.

6
Accepted return of damaged merchandise from Jordan Clark; issued Credit Memorandum 302 for $150 plus tax. The original sale was made on Sales Slip 908 of April 4.

Answer 1

Journal entries
Date	Accounts title and explanation				Debit $	Credit $
2-Apr	Cash Account Dr.				2700
	Sales revenue Account					2500
	Sales tax payable (2500*8%)					200
3-Apr	Sales return And allowance Account Dr.				250
	Sales tax payable (250*8%)				20
	Cash account					270
4-Apr	Accounts receivable-Jordan Dr.				1134
	Sales revenue Account					1050
	Sales tax payable (1050*8%)					84
6-Apr	Sales return and allowance Account Dr.				150
	Sales tax payable (150*8%)				12
	Accounts receivable-Jordan					162