Excise and Sales Tax Calculations Barnes Company has just billed a customer for
ID: 2566052 • Letter: E
Question
Excise and Sales Tax Calculations
Barnes Company has just billed a customer for $1,010, an amount that includes a eleven percent excise tax and a four percent state sales tax.
a. What amount of revenue is recorded?
b. Prepare a general journal entry to record the transaction on the books of Barnes Company.
Round all answers to the nearest dollar.
a. Amount of recorded revenue $Answer
b.
General Journal Date Description Debit Credit Dec.31 AnswerAccounts ReceivableExcise Tax PayableSales Tax PayableSales $Answer $Answer Excise Tax Payable Answer Answer Sales Tax Payable Answer Answer AnswerAccounts ReceivableExcise Tax PayableSales Tax PayableSales Answer Answer To record sale on account subject to excise tax and sales tax.Explanation / Answer
Revenue will be recorded of $878
Calculation
Excise tax = [1010/(100+11+4)] * 11 = (1010/115)*11 = 97
State sales tax = (1010/115) * 4 = $35
Date Description Debit $ Credit $ Dec 31 Accounts receivables 1010 Excise tax payable 97 Sales tax payable 35 Sales 878 Being sales done with 11% excise tax & 4% state sales tax chargedRelated Questions
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