In performing accounting services for small businesses, you encounter the follow
ID: 2587930 • Letter: I
Question
In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Pharoah Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $30,500 and sales taxes $1,525. 2. Cullumber Company does not segregate sales and sales taxes. Its register total for April 15 is $19,260, which includes a 7% sales tax. Collapse question part (a) Prepare the entry to record the sales transactions and related taxes for Pharoah Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Explanation / Answer
Answer:
(a) Prepare the entry to record the sales transactions and related taxes for Pharoah Company.
Date
Account Titles and Explanation
Debit
Credit
April.10
Cash (30500+1525)
32025
Sales revenue
30500
ales Tax payable
1525
(Being entry for recording cash sales)
Date
Account Titles and Explanation
Debit
Credit
April.10
Cash (30500+1525)
32025
Sales revenue
30500
ales Tax payable
1525
(Being entry for recording cash sales)