Dextra, Inc. sells merchandise for $8,500 cash on September 30 (cost of merchand

Question

Dextra, Inc. sells merchandise for $8,500 cash on September 30 (cost of merchandise is $5,600). The sales tax law requires Dextra to collect 6% sales tax on every dollar of merchandise sold.
A. Record the entry for the $8,500 sale and it’s applicable sales tax.
B. Record the entry to expense the cost merchandise.
C. Record the entry that shows the remittance of the 6% tax on its sale to the state government on October 15. Dextra, Inc. sells merchandise for $8,500 cash on September 30 (cost of merchandise is $5,600). The sales tax law requires Dextra to collect 6% sales tax on every dollar of merchandise sold.
A. Record the entry for the $8,500 sale and it’s applicable sales tax.
B. Record the entry to expense the cost merchandise.
C. Record the entry that shows the remittance of the 6% tax on its sale to the state government on October 15.
A. Record the entry for the $8,500 sale and it’s applicable sales tax.
B. Record the entry to expense the cost merchandise.
C. Record the entry that shows the remittance of the 6% tax on its sale to the state government on October 15.

Explanation / Answer

Sep-30 Cash ($8,500+($8,500*6%)) $ 9,010 Sales revenue $ 8,500 Sales tax payable $     510 Sep-30 Cost of goods sold $ 5,600 Merchandise inventory $ 5,600 Sep-30 Sales tax payable $     510 Cash $     510

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