Question

On July 15, Piper Co. sold $24,000 of merchandise (costing $12,000) for cash. The sales tax rate is 4%. On August 1, Piper sent the sales tax collected from the sale to the government. Record entries for the July 15 and August 1 transactions. On November 3, the Milwaukee Bucks sold a six game pack of advance tickets for $720 cash. On November 20, the Bucks played the first game of the six game pack (this represented one-sixth of the advance ticket sales). Record the entries for the November 3 and November 20 transactions.

View transaction list View journal entry worksheet
No Date General Journal Debit Credit
1 Jul 15 No Transaction Recorded
2 Jul 15 No Transaction Recorded
3 Aug 01 No Transaction Recorded
4 Nov 03 No Transaction Recorded
5 Nov 20 No Transaction Recorded

Answer 1

Answer and Explanation:

The Journal entry is shown below:-

1. Jul 15

Cash Dr, $29,960

To Sales revenue $24,000

To Sales tax payable $960

($24,000 × 4%)

(Being sales is recorded)

2. Jul 15

Cost of goods sold Dr, $12,000

To Merchandise inventory $12,000

(Being cost of goods sold is recorded)

3. Aug 01

Sales tax payable Dr, $960

To Cash $960

(Being payment of sales tax is recorded)

4. Nov 03

Cash Dr, $720.00

To Unearned ticket revenue $720.00

(Being sale of advance tickets is recorded)

5. Nov 20

Unearned ticket revenue Dr, $120

( $720 ÷ 6)

To Ticket revenue $120

(Being ticket revenue is recorded)