Journalize the entries to record the following selected transactions:
a. Sold $62,800 of merchandise on account, subject to a sales tax of 5%. The cost of the merchandise sold was $37,500.
b. Paid $39,650 to the state sales tax department for taxes collected.
Answer:
a. Accounts Receivable65,940
Sales62,800
Sales Tax Payable ($62,800 × 5%)3,140
Cost of Merchandise Sold37,500
Merchandise Inventory37,500
b. Sales Tax Payable39,650
Cash39,650