Question

Sales Tax Cobb Baseball Bats sold 45 bats for $50 each, plus an additional state sales tax of 6%. The customer paid cash.Required: Prepare the journal entry to record the sale. If an amount box does not require an entry, leave it blank.a. blank.


b. Cash


c. Sales


d. Revenue Sales


e. Tax Payable

Answer 1

Answer:

Cobb Baseball

Journal Entry

Sr No               Particulars                 Debit           Credit

                     Cash                            2385Dr

                    Sales                                                   2250Cr

                     Tax Payable                                        135Cr

Explanation:

45 bats for $ 50= 45*50= 2250

Tax = 6 %of 2250 = $135

total cash received = $2250 + 135 = $2385

The tax payable is the liability of the company to pay tax. The sales are made of $ 2250 and the cash received is $ 2385 including the tax of 6 %.

Usually the sales tax is included in the sales price of an item. But some companies collect it separately and treat it in a separate account.