Cantrell Company is required by law to collect and remit sales taxes to the stat

Question

Cantrell Company is required by law to collect and remit sales taxes to the state. If Cantrell has $8,000 of cash sales that are subject to an 8% sales tax, what is the journal entry to record the cash sales? Multiple Choice Debit Cash $8,000; credit Sales $7,360; credit Sales Taxes Payable $640. Debit Sales Taxes Payable $640; debit Cash $7,360; credit Sales $8,000. Debit Cash $8,000; credit Sales $8,000; and record the taxes when paid. Debit Cash $8,640; credit Sales $8,000; credit Sales Taxes Payable $640. Debit Accounts Receivable $8,640; credit Sales $8,000; credit Sales Taxes Payable $640

Explanation / Answer

Journal entry to record cash sales ::

so answer is a) Debit Cash $8,000; credit Sales $7,360; credit Sales Taxes Payable $640.

Date accounts & explanation debit credit Cash 8000      Sales 7360      Sales tax payable 640 (To record sale and sales tax payable)

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