Exercise 8-3 In performing accounting services for small businesses, you encount

Question

Exercise 8-3 In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales 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. Prepare tabular summaries to record the sales transactions and related taxes for Cerviq Company. (If a transaction causes a decrease in Assets, Liabilities or Stockholders Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets Liabilities Stockholders' Equity Retained Earnings Expense Cash = Sales Taxes Pay. + Common Stock + Revenue Dividend - - Apr. 10 Sales revenue Prepare tabular summaries to record the sales transactions and related taxes for Quartz Company. (If a transaction causes a decrease in Assets, Liabilities or Stockholders Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets Liabilities Stockholders' Equity Retained Earnings Cash - Sales Taxes Pay. +Common StockRevenuexpense Dividend Apr. 15 Sales revenue Click if you would like to show work for this question: Open Show work

Explanation / Answer

Tabular summary :

Assets = Liabilities + Stockholder's equity Retained earnings Cash = Sales taxes pay + Common Stock + Revenue - Expense - Dividend Apr 10 23100 = 1100 + 0 22000 0 0 Sales revenue Apr 15 13780 = 780 + 0 13000 0 0 Sales revenue

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