Question

Prepare journal entries for the following transactions.
Aug. 4 Sold merchandise on account to S. Miller for $320 plus sales tax of 4%, with 2/10, n/30 cash discount terms.
6 Sold merchandise on account to K. Krtek for $210 plus sales tax of 4%.
10 S. Miller returned merchandise purchased on August 4 for $20 plus sales tax for credit.
13 S. Miller paid the balance due on her account.
15 K. Krtek returned merchandise purchased on August 6 for $40 plus sales tax for credit.
20 K. Krtek paid the balance due on his account.

Answer 1

Answer:

General Journal Entries:

August 4:

Debit Accounts Receivable (S. Miller) $332.80

Credit Sales Tax Payable $12.80

Credit Sales Revenue $320

To record the sale of goods on account, plus sales tax of 4% with 2/10, n/30 cash discount terms.

August 6:

Debit Accounts Receivable (K.Krtek) $218.40

Credit Sales Tax Payable $8.40

Credit Sales Revenue $210

To record the sale on account plus sales tax of 4%.

August 10:

Debit Sales Returns $20

Debit Sales Tax Payable $0.80

Credit Accounts Receivable (S. Miller) $20.80

To record the record of merchandise on account.

August 13:

Debit Cash Account $306

Debit Cash Discount $6

Credit Accounts Receivable (S. Miller) $312

To record receipt of cash from S. Miller.

August 15:

Debit Sales Returns $40

Debit Sales Tax Payable $1.60

Credit Accounts Receivable (K. Krtek) $41.60

To record the return of goods.

August 20:

Debit Cash Account $176.80

Credit Accounts Receivable (K. Krtek) $176.80

To record the receipt of cash on account.

Explanation:

The general journal entries are made to record the business transaction as they occur on a daily basis.  The accounts involved in each transaction are identified and one account is debited and the other credited accordingly.