2 Mason Company makes sales on which an 6 sales tax is asses

2. Mason Company makes sales on which an 6% sales tax is assessed. The following summary transactions were made during 2015 a. Cash sales of $900,000, excluding sales taxes. b. Credit sales of $2,150,000, including sales taxes. c. Sales taxes of $213,500 were paid to the state Required: Pe cum c

Solution

Journal entries

No.	accounts & explanation	debit	credit
a.	Cash a/c	954000
	Sales a/c		900000
	Sales tax payable (900000*6%)		54000
	(To record cash sales)
b)	Account receivable	2150000
	Sales a/c		2028302
	Sales tax payable		121698
	(to record credit sales)
c	Sales tax payable a/c	213500
	Cash a/c		213500
	(To record sales tax paid)