Question

Journalize the entries to record the following selected transactions. Refer to the Chart of Accounts for exact wording of account titles.

A.	Sold $61,700 of merchandise on account, subject to a sales tax of 6%. The cost of the goods sold was $38,720.
B.	Paid $40,670 to the state sales tax department for taxes collected.

CHART OF ACCOUNTS

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
125	Notes Receivable
130	Inventory
131	Estimated Returns Inventory
140	Office Supplies
141	Store Supplies
142	Prepaid Insurance
180	Land
192	Store Equipment
193	Accumulated Depreciation-Store Equipment
194	Office Equipment
195	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
216	Salaries Payable
218	Sales Tax Payable
219	Customer Refunds Payable
220	Unearned Rent
221	Notes Payable

	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends

	REVENUE
410	Sales
610	Rent Revenue

	EXPENSES
510	Cost of Goods Sold
521	Delivery Expense
522	Advertising Expense
524	Depreciation Expense-Store Equipment
525	Depreciation Expense-Office Equipment
526	Salaries Expense
531	Rent Expense
533	Insurance Expense
534	Store Supplies Expense
535	Office Supplies Expense
536	Credit Card Expense
539	Miscellaneous Expense
710	Interest Expense

Journalize the entries to record the selected transactions on December 31. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7

Answer 1

	Account title and explanation	Debit	Credit	Assets	Liabilities	Equity
A	Accounts receivable	$65,402		+
	Sales revenue		$61,700			+
	Sales tax payable [61700 x 6%]		$3,702		+
	[To record credit sales]
	Cost of goods sold	$38,720				-
	Inventory		$38,720	-
	[To record cost of goods sold]
B	Sales tax payable	$40,670			-
	Cash		$40,670	-
	[To record payment of sales tax]