The following selected transactions relate to liabilities of Interstate Farm Imp
ID: 2562446 • Letter: T
Question
The following selected transactions relate to liabilities of Interstate Farm Implements for December of 2016. Interstate’s fiscal year ends on December 31.
During December, credit sales totaled $942,000. The state sales tax rate is 5% and the local sales tax rate is 2%.
Note: Enter debits before credits.
On December 15, received $13,000 from Bradley Farms toward the purchase of a $169,000 tractor to be delivered on January 6, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
On December 15, received $13,000 from Bradley Farms toward the purchase of a $169,000 tractor to be delivered on January 6, 2017.
Note: Enter debits before credits.
During December, received $36,000 of refundable deposits relating to containers used to transport equipment parts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
During December, received $36,000 of refundable deposits relating to containers used to transport equipment parts.
Note: Enter debits before credits.
3. During December, credit sales totaled $942,000. The state sales tax rate is 5% and the local sales tax rate is 2%. (This is a summary journal entry for the many individual sales transactions for the period.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Required: Prepare the appropriate journal entries for these transactions.Explanation / Answer
Journal Entry
date
explanation
debit
credit
15-Dec
cash
13000
revenue received in advance
13000
December
cash
36000
refundable deposits
36000
December
accounts receivables
942000
sales revenue
942000/1.07
880373.8
sales tax payable
942000-880373.8
61626.17
Journal Entry
date
explanation
debit
credit
15-Dec
cash
13000
revenue received in advance
13000
December
cash
36000
refundable deposits
36000
December
accounts receivables
942000
sales revenue
942000/1.07
880373.8
sales tax payable
942000-880373.8
61626.17