Your roommate says, “Sales taxes are reported as an expense in the income statement.” Do you agree? Agree or Disagree Jensen Company has cash proceeds from sales of $8,400. This amount includes $400 of sales taxes. Give the entry to record the proceeds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

Your roommate says, “Sales taxes are reported as an expense in the income statement.” Do you agree? Agree or Disagree Jensen Company has cash proceeds from sales of $8,400. This amount includes $400 of sales taxes. Give the entry to record the proceeds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter9: Sales And Purchases

Section: Chapter Questions

Problem 3A: Following is a trial balance prepared just before you were hired. Two accounts are missing, and the...

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Following is a trial balance prepared just before you were hired. Two accounts are missing, and the amount for Sales is off. Here are a few facts to consider. Our business is in a state that collects sales tax. I ran some totals, and we collected 1,800 in sales tax. Customers returned 900 in goods, which would reduce the above sales tax by 70. Our books need to reflect these events. The former accounting clerk said that she recorded everythingsomewhere. She said that she may have credited the 1,800 sales tax to Sales and not to Sales Tax Payable. And she looked confused when Sales Returns and Allowances was mentioned. She asked, Why not just debit Sales? Determine the two missing accounts and correct the accounts that are off. 1. Think about where these amounts might have been put, think about what accounts are missing, and use T accounts to solve the problems. 2. Prepare a corrected trial balance.
In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Sunland Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $31,500 and sales taxes $1,575. 2. Crane Company does not segregate sales and sales taxes. Its register total for April 15 is $23,850, which includes a 6% sales tax. Prepare the entry to record the sales transactions and related taxes for Sunland Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 10 enter an account title to record the sales transactions and related taxes for Sunland Company on April 10 enter a debit amount enter a credit amount enter an account title to record the sales transactions and related taxes for Sunland Company on April 10 enter a debit amount enter a…
In performing accounting services for small businesses, you encounter the following situations per taining to cash sales. 1. Tamarisk, Inc. enters sales and sales taxes separately in its cash register. On April 10, the register totals are sales $37,500 and sales taxes $1,875. 2. Ivanhoe Company does not segregate sales and sales taxes. Its register total for April 15 is $24,610, which includes a 7% sales tax. Prepare the entry to record the sales transactions and related taxes for each client. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit Tamarisk, Inc. 1. choose a transaction date enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit…
In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Carla Vista Co. enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $26,500 and sales taxes $1,325. 2. Wildhorse Co. does not segregate sales and sales taxes. Its register total for April 15 is $18,550, which includes a 6% sales tax. (a) Prepare the entry to record the sales transactions and related taxes for Carla Vista Co.. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 10 enter an account title to record the sales transactions and related taxes for Carla Vista Co. on April 10enter an account title to record the sales transactions and related taxes for Carla Vista Co. on April 10 enter a debit amountenter a debit amount enter a credit amountenter a…
In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Pina Colada Corp. enters sales and sales taxes separately in its cash register. On April 10, the register totals are sales $37,000 and sales taxes $1,850. 2. Cullumber Company does not segregate sales and sales taxes. Its register total for April 15 is $22,896, which includes a 6% sales tax. Prepare the entry to record the sales transactions and related taxes for each client. Omit the cost of goods sold entry.
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A company regularly sells its receivables to a factor who assesses a 2% service charge on the amount of receivables purchased. Which of the following statements is true for the seller of the receivables? The credit to Accounts Receivable is less than the debit to Cash when the accounts are sold. Selling expenses will increase each time accounts are sold. The other expense section of the income statement will increase each time accounts are sold. The loss section of the income statement will increase each time receivables are sold.
In each of the situations described below, indicate the accounting principles or concepts, if any, that have been violated and explain briefly the nature of the violation. If you believe the practice is in accord with generally accepted accounting principles, state this as your position and defend it. a. A small business in which credit sales fluctuate greatly from year to year uses the direct writeoff method both for income tax purposes and in its financial statements. b. Computer Systems often sells merchandise in exchange for interest-bearing notes receivable, maturing in 6, 12, or 24 months. The company records these sales transactions by debiting Notes Receivable for the maturity value of the notes, crediting Sales for the sales price of the merchandise, and crediting Interest Revenue for the balance of the maturity value of the note. The cost of goods sold also is recorded. c. A company has $400,000 in unrestricted cash, $1 million in a bank account specifically earmarked for the…
A supplier sends you a statement showing a balance outstanding of $14,350. Your own records show a balance outstanding of $14,500. Which one of the following could be the reason for this difference? A The supplier sent an invoice for $150 which you have not yet received. B The supplier has allowed you $150 cash discount which you had omitted to enter in your ledgers. C You have paid the supplier $150 which he has not yet accounted for. D You have returned goods worth $150 which the supplier has not yet accounted for. Please give detailed answer with explaination
Use the following information for the Problems below. Skip to question [The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 58,900 $ 79,500 Accounts receivable 74,830 56,625 Inventory 284,656 257,800 Prepaid expenses 1,270 2,015 Total current assets 419,656 395,940 Equipment 151,500 114,000 Accum.…
Use the following information for the Problems below. Skip to question [The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 58,900 $ 79,500 Accounts receivable 74,830 56,625 Inventory 284,656 257,800 Prepaid expenses 1,270 2,015 Total current assets 419,656 395,940 Equipment 151,500 114,000 Accum.…