Please help! It would be greatly appreciated! Exercise 10-4 In performing accoun
ID: 2430973 • Letter: P
Question
Please help! It would be greatly appreciated!
Exercise 10-4 In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Wildhorse Co. enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $33,000 and sales taxes $1,650 Carla Vista Co. does not segregate sales and sales taxes. Its register total for April 15 is $22 140, which includes a 3% sales tax. Prepare the entry to record the sales transactions and related taxes for Wildhorse Co.. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Apr. 10 Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO: SIMILAR EXERCISEExplanation / Answer
Answers
Date
Account title
Debit
Credit
Apr-10
Cash
$ 34,650.00
Sales Revenue
$ 33,000.00
Sales Tax Payable
$ 1,650.00
(sales recorded)
Here, we have to bi-furcate Sales Tax amount from total cash received.
>Total Cash received $ 22,140 which includes 8% sales Tax.
>Hence, $ 22,140 equals to 108% [Sales 100% + Sales Tax 8% on Sales = 108% Cash received]
>Amount of Sales = 22,140 / 108% = $ 20,500
>Amount of Sales Tax Payable = 22140 – 20500 = $ 1,640 OR 20500 x 8% = $ 1,640
Date
Account title
Debit
Credit
Apr-15
Cash
$ 22,140.00
Sales Revenue
$ 20,500.00
Sales Tax Payable
$ 1,640.00
(sales recorded)
Date
Account title
Debit
Credit
Apr-10
Cash
$ 34,650.00
Sales Revenue
$ 33,000.00
Sales Tax Payable
$ 1,650.00
(sales recorded)