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 situations pertaining to cash sales.

Prepare the entry to record the sales transactions and related taxes for Cerviq Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Prepare the entry to record the sales transactions and related taxes for Quartz Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account titles to use for this exercise:

Accounts Payable
Accounts Receivable
Accumulated Depreciation-Equipment
Accrued Pension Liability
Bonds Payable
Buildings
Cash
Common Stock
Cost of Goods Sold
Current Portion of Long-Term Debt
Depreciation Expense
Discount on Bonds Payable
Dividends
Equipment
Federal Income Taxes Payable
Federal Unemployment Taxes Payable
FICA Taxes Payable
Gain on Bond Redemption
Income Tax Expense
Income Taxes Payable
Insurance Expense
Interest Expense
Interest Payable
Inventory
Land
Loss on Bond Redemption
Mortgage Payable
No Entry
Notes Payable
Other Operating Expenses
Payroll Tax Expense
Premium on Bonds Payable
Prepaid Insurance
Property Taxes Payable
Retained Earnings
Salaries and Wages Expense
Salaries and Wages Payable
Sales Revenue
Sales Taxes Payable
Service Revenue
Share Premium-Conversion Equity
State Income Taxes Payable
State Unemployment Taxes Payable
Subscription Revenue
Ticket Revenue
Unearned Rent Revenue
Unearned Sales Revenue
Unearned Service Revenue
Unearned Subscription Revenue
Unearned Ticket Revenue
Union Dues Payable
Warranty Liability

1. 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. 2. Quartz Company does not segregate sales and sales taxes. Its register total for April 15 is $13,780, which includes a 6% sales tax.

Explanation / Answer

General Journal Debit Credit Cerviq Company (a) Cash $23,100 Sales Revenue $22,000 Sales Tax payable $1,100 Quartz Company (b) Cash $13,780 Sales Revenue $13,000 Sales Tax payable $780

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