Question

Crane Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $23,000 and sales taxes $1,150. 2. Sunland Company does not segregate sales and sales taxes. Its register total for April 15 is $14,840, which includes a 6% sales tax.Prepare the entry to record the sales transactions and related taxes for Crane Company.

Answer 1

1. Crane Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $23,000 and sales taxes $1,150.

Dr. Cr.

Cash $24,150

Sales $23,000

Sales tax Payable $1,150

2. Sunland Company does not segregate sales and sales taxes. Its register total for April 15 is $14,840, which includes a 6% sales tax.

Dr. Cr.

Cash $14,840

Sales $14,000

Sales tax Payable $840

Working:

Sales Tax = ( $14,840 / 106 ) x 6 = $840

Sales = $14,840 - $840 = $14,000