Question

On February 13, a jewelry store sells an engagement ring with a sales price of $10,000 to a nervous young man, who pays in cash. The sale is subject to a 9.75 percent sales tax. Prepare the revenue portion of the February 13 by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

Answer 1

cash 10,000 debit

sales tax tayable 975

sales revenue 9.025

Step-by-step explanation:

the sale was made on cash, so we use cash account.

then to calculate the sale tax tayable:

sales price x tax sale rate = sale tax payable

10,000 x 0.0975 = 975

finally the revenue will be the diference between the proceeds of the sale and the taxes.

revenue = price - tax = 10,000 - 975 = 9,025