Question

If there is a sales tax rate of 8.25% and a company collected $84,435 from customers,...

If there is a sales tax rate of 8.25% and a company collected $84,435 from customers, they will debit cash, credit sales revenue, and what other account will they credit?

Homework Answers

Answer #1

Journal Entry will be as follows:

Cash Dr          84,435
Sales Cr          78,000
Sales Tax Payable Cr            6,435

The other account that will be credited as asked in Question is Sales Tax Payable A/c.

Total amount of $84,435 received from customers is inclusive of 8.25% Sales Tax. Revenue will be booked only at net amount.

Thus revenue amount is = 84,435 * 100 / 108.25 = $78,000

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
True or False 1. A company makes a credit sale for $500. Future collection from the...
True or False 1. A company makes a credit sale for $500. Future collection from the customer is probable. The company will not record revenue from the transaction until it collects cash from the customer. 2. Credit sales involve benefits and costs. A benefit of selling on credit is that the seller makes it more convenient for customers to purchase goods and services. A cost of selling on credit is that there is a delay in collecting cash from customers....
OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 30% of monthly...
OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 30% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 25% pay their accounts in the month of sale, while the remaining 75% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows: October $129,000 November 161,000 December 236,000 The Accounts Receivable balance on September 30...
Bigelow Company sells goods to its customers in December 2009 for $150,000 with payment due in...
Bigelow Company sells goods to its customers in December 2009 for $150,000 with payment due in January 2010.  If the company receives $150,000 from its customers in January 2010, then which of the following reflects how Bigelow will record the receipt of the cash? a. Debit cash for $150,000 and credit accounts receivable for $150,000. b. Debit cash for $150,000 and credit sales for $150,000. c. Debit accounts receivable for $150,000 and credit cash for $150,000. d. Debit cash for $150,000...
Assuming a tax rate of 12%, calculate the sales tax and VAT per stage of the...
Assuming a tax rate of 12%, calculate the sales tax and VAT per stage of the chain. VAT Sales Tax A mining company extracts raw materials and sells them to a metal processor company for 20,000 plus tax (if applicable) Tax collected by the mining company: Tax collected by the mining company: Tax kept by the mining company: Tax kept by the mining company: Tax sent from mining company to gov: Tax sent from mining company to gov: The metal...
Smart Touch Learning sells a $300 tablet for cash with an 8​% sales tax rate. When...
Smart Touch Learning sells a $300 tablet for cash with an 8​% sales tax rate. When recording the journal entry for this​ sale, Smart Touch Learning will A. Credit Sales Tax Payable for 24 B. Credit sales for 324 C. Debit Accounts Receivable for 300 d. Debit Sales Tax Payable for 48
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 30% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows: October $123,000 November 154,000 December 225,000...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 25% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 25% pay their accounts in the month of sale, while the remaining 75% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows: October $107,000 November 134,000 December 196,000...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 20% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 25% pay their accounts in the month of sale, while the remaining 75% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows: October $107,000 November 134,000 December 196,000...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 30% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows: October $117,000 November 146,000 December 214,000...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 30% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows: October $129,000 November 161,000 December 236,000...