In providing accounting services to small businesses, you encounter the followin
ID: 2358268 • Letter: I
Question
In providing accounting services to small businesses, you encounter the following situations pertaining to cash sales. 1. Duvall Company rings up sales and sales taxes seperately on its cash register. On April 10, the register totals are sales $22,000 and sales taxes $1,100. 2. Hubbard Company does not segregate sales and sales taxes. Its register total for April 15 is $13,780, which includes a 6% sales tax. **Prepare the entries to record the sales transactions and related taxes for (a) Duvall Company and (b) Hubbard Company.Explanation / Answer
Duall Company rings up sales and sales taxes separately on its cash register. On April 10, the register totals are sales $22,000 and sales taxes $1,100. Dr Cash 23,100 Cr Sales 22,000 Cr Sales Tax Payable 1,500 Hubbard Company does not segregate sales and sales taxes. Its register total for April 15 is $13,780, which includes a 6% sales tax. 13780 / 1.06 = 13,000 sales Dr Cash 13,780 Cr Sales 13,000 Cr Sales Tax Payable 780