In providing accounting services to small businesses, you encounter the followin
ID: 2499671 • Letter: I
Question
In providing accounting services to small businesses, you encounter the following situations pertaining to cash sales. 1. Furcal Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $37,500 and sales taxes $1,875. 2. Crystal Company does not segregate sales and sales taxes. Its register total for April 15 is $10,600, which includes a 6% sales tax.
Prepare the entries to record the sales transactions and related taxes for Furcal Company
Prepare the entries to record the sales transactions and related taxes for Crystal Company
Explanation / Answer
Duall Company rings up sales and sales taxes separately on its cash register. On April 10, the register totals are sales $37,500 and sales taxes $1,875.
Dr Cash 39,375
Cr Sales 37,500
Cr Sales Tax Payable 1,500
Hubbard Company does not segregate sales and sales taxes. Its register total for April 15 is $10,600, which includes a 6% sales tax.
10600 / 1.06 = 10,000 sales
Dr Cash 10,600
Cr Sales 10,000
Cr Sales Tax Payable 780