Exercise 10-4 In performing accounting services for small businesses, you encoun

Question

Exercise 10-4 In performing accounting services for small businesses, you encounter the following stuations pertaining to cash sales 1. Sandhill Co. enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $27,000 and sales taxes $1,350 Carla Vista Co. does not segregate sales and sales taxes. Its register total for April Sis S?s,660, which indudes a 8% sales tax. Your answer is correct. Prepare the entry to record the sales transactions and related taxes for Sandhill Co..(Credit account tites arn automatialy Indented when anount a not indent manually.) Debit Credit Date Account Titles and Explanation 28350 Apr. 10 |Cash Sales Revenue 13 Sales Taxes Payable SHOW LIST OF ACCOUNTS IDEO: SIMILAR EXERCISE

Explanation / Answer

Ans.2 Date Accounts titles & Explanations Debit Credit 15-Apr Cash 15660 Sales revenue (15660 / 1.08) 14500 Sales tax payable (14500 * 8%) 1160 *Sales revenue includes sales tax amount it means it is on (100 + 8%), so we have to separate the sales revenue and sales taxes.

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