Question

Bluestem Supply does not does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $14,280. All sales are subject to a 5% sales tax.

(a) Compute sales taxes payable.
(b) Make the entry to record sales taxes payable and sales.

Answer 1

To compute the sales taxes payable, multiply the register total by the sales tax rate. The journal entry to record sales taxes payable and sales involves a debit to Sales Taxes Payable and a credit to Sales.

Step-by-step explanation:

To compute the sales taxes payable for Bluestem Supply, we need to multiply the register total by the sales tax rate of 5%. $14,280 x 0.05 = $714. The sales taxes payable is $714.

To record the sales taxes payable and sales in the journal entry, we debit Sales Taxes Payable for $714 and credit Sales for $14,280. This entry reflects the liability for the sales taxes and the revenue from the sales.