Exercise 10-3 In performing accounting services to small businesses, you encount
ID: 2550122 • Letter: E
Question
Exercise 10-3
In performing accounting services to small businesses, you encounter the following situations pertaining to cash sales.
1.
2.
Prepare the entry to record the sales transactions and related taxes for each client. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Date
Account Titles and Explanation
Debit
Credit
POOLE COMPANY
WATERMAN COMPANY
1.
Poole Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $38,500 and sales taxes $1,925.2.
Waterman Company does not segregate sales and sales taxes. Its register total for April 15 is $24,380, which includes a 6% sales tax.Explanation / Answer
No. Date Account titles and explanation Debit Credit POOLE COMPANY 1. Apr. 10 Cash $40,425 Sales Revenue $38,500 Sales Tax payable $1,925 WATERMAN COMPANY 2. Apr. 15 Cash $24,380 Sales Revenue $23,000 Sales Tax payable($24,380 * 6/106) $1,380
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