On March 15, Topi Company sells $14,000 of merchatidise to a customer. The sales

Question

On March 15, Topi Company sells $14,000 of merchatidise to a customer. The sales tax rate is 9% and the customer pays with cash. What journal entry should the company make to record this safe? Dr_Cr Cr What effect does this entry have on the accounting equation? Assets = Liabilities + Equity In April, Topi Company must pay the sales tax it has collected to the state taxing agency. The company owes $14.200 from sales tax in the month of March. What journal entry does the company make to record the April payment to the state taxing agency? Dr_Cr What effect does this entry have on the accounting equation? Assets = Liabilities + Equity

Explanation / Answer

1..a..

Sales tax=14000*9%=1260

Journal entry

b.

Effect on accounting equation

Assets = liabilities + equity

+15260. = +1260 + 14000

2. a

Journal entry for payment of sale tax

b.

Effect on accounting equation

Assets = liabilities + equity

-14200 = -14200   

Date account titles debit credit Mar15 cash 15260 Sales tax payable 1260 Sales 14000

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