In performing accounting services for small businesses, you encounter the follow
ID: 2568280 • Letter: I
Question
In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. Cerviq Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $22,000 and sales taxes $1,100. Quartz Company does not segregate sales and sales taxes. Its register total for April 15 is $13,780, which includes a 6% sales tax. Instructions Prepare the entries to record the sales transactions and related taxes for (a) Cerviq Company and (b) Quartz Company. Journalize payroll entries.
Explanation / Answer
DR in $ CR In $ CERVIQ COMPANY Cash Account Dr. 23100 Sales Revenue Cr. 22000 Sales Tax payable Cr. 1100 QUARTZ COMPANY Cash Account Dr. 13780 Sales Revenue Cr. 13000 Sales Tax payable Cr. 780 (13780/106*6)