Question

Exercise 10-4

In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales.

1. Cullumber Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $29,000 and sales taxes $1,450.
2. Ivanhoe Company does not segregate sales and sales taxes. Its register total for April 15 is $17,820, which includes a 8% sales tax.

Prepare the entry to record the sales transactions and related taxes for Cullumber Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
Apr. 10
enter an account title to record the sales transactions and related taxes for Cullumber Company on April 10
enter a debit amount
enter a credit amount
enter an account title to record the sales transactions and related taxes for Cullumber Company on April 10
enter a debit amount
enter a credit amount
enter an account title to record the sales transactions and related taxes for Cullumber Company on April 10
enter a debit amount
enter a credit amount

LINK TO TEXT

Prepare the entry to record the sales transactions and related taxes for Ivanhoe Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
Apr. 15
enter an account title to record the sales transactions and related taxes for Ivanhoe Company on April 15
enter a debit amount
enter a credit amount
enter an account title to record the sales transactions and related taxes for Ivanhoe Company on April 15
enter a debit amount
enter a credit amount
enter an account title to record the sales transactions and related taxes for Ivanhoe Company on April 15
enter a debit amount
enter a credit amount

Answer 1

Solution :

Journal Entries - Cullumber Company
Date	Particulars	Debit	Credit
10-Apr	Cash Dr	$30,450.00
	To Sales revenue		$29,000.00
	To Sales Tax Payable		$1,450.00
	(To record sales and related sales tax payable)

Journal Entries - Ivanhoe Company
Date	Particulars	Debit	Credit
15-Apr	Cash Dr	$17,820.00
	To Sales revenue ($17,820/108%)		$16,500.00
	To Sales Tax Payable		$1,320.00
	(To record sales and related sales tax payable)