Journalize the entries to record the following selected tran

Journalize the entries to record the following selected transactions: (9.5 pts)

12/20 - Sold $900 of merchandise on account, subject to 7% sales tax.  The cost of the merchandise sold was $510.

12/31 - Paid $436 to the state sales tax department for taxes collected.

Date

Account Titles

Debits

Credits

Date	Account Titles	Debits	Credits

Solution

Journal entries: Date Accounts title and explanations Debit $ Credit $ 20-Dec Accounts receivable Account Dr. 963        Sales revenue 900        Sales tax payable Account (900*7%) 63 Cost of Goods sold Account Dr. 510      Inventory Account 510 31-Dec Sales tax payable Account Dr. 436      Cash account 436