JOURNALIZING SALES TRANSACTIONS Enter the following transactions in a general journal. Use a 5% sales tax rate. Sept. 1 Sold merchandise on account to K. Smith, $1,800 plus sales tax. Sale No. 228. 3 Sold merchandise on account to J. Arnes, $3,100 plus sales tax. Sale No. 229. 5 Sold merchandise on account to M. Denison, $2,800 plus sales tax. Sale No. 230. 7 Sold merchandise on account to B. Marshall, $1,900 plus sales tax. Sale No. 231.

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College Accounting, Chapters 1-27 ...

22nd Edition

James A. Heintz + 1 other

Publisher: Cengage Learning

ISBN: 9781305666160

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Answer 2

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College Accounting, Chapters 1-27 ...

22nd Edition

James A. Heintz + 1 other

Publisher: Cengage Learning

ISBN: 9781305666160

Solutions

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Answer 3

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Answer 4

Chapter

Section

Answer 5

To determine

Journalize the transactions related to sales transactions.

Explanation of Solution

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

Journalize the transactions related to sales transactions.

Transaction on September 1:

Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	1	Accounts Receivable, KS			1,890
			Sales			1,800
			Sales Tax Payable			90
		(Record credit sale)

Table (1)

Description:

Accounts Receivable, KS is an asset account. Since sales is made on account, the receivables increased, and an increase in asset is debited.
Sales is a revenue account. Since revenues and gains increase equity, equity value is increased, and an increase in equity is credited.
Sales Tax Payable is a liability account. Since the payable increased, the liability increased, and an increase in liability is credited.

Working Note 1:

Compute sales tax payable amount.

Sales tax payable = Sales×Sales tax percentage= $1,800×5%= $90

Working Note 2:

Compute accounts receivable amount (Refer to Working Note 1 for value of sales tax payable).

Accounts receivable, KS = Sales+Sales tax payable= $1,800+$90= $1,890

Transaction on September 3:

Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	3	Accounts Receivable, JA			3,255
			Sales			3,100
			Sales Tax Payable			155
		(Record credit sale)

Table (2)

Description:

Accounts Receivable, JA is an asset account. Since sales is made on account, the receivables increased, and an increase in asset is debited.
Sales is a revenue account. Since revenues and gains increase equity, equity value is increased, and an increase in equity is credited.
Sales Tax Payable is a liability account. Since the payable increased, the liability increased, and an increase in liability is credited.

Working Note 3:

Compute sales tax payable amount.

Sales tax payable = Sales×Sales tax percentage= $3,100×5%= $155

Working Note 4:

Compute accounts receivable amount (Refer to Working Note 3 for value of sales tax payable).

Accounts receivable, JA = Sales+Sales tax payable= $3,100+$155= $3,255

Transaction on September 5:

Date

Account Titles and Explanation

Post Ref

College Accounting, Chapters 1-27 ...

Solutions

College Accounting, Chapters 1-27 ...

Explanation of Solution

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The Solution to Your Study Problems

Chapter 10 Solutions

Additional Business Textbook Solutions

Sept.	1	Sold merchandise on account to K. Smith, $1,800 plus sales tax. Sale No. 228.
	3	Sold merchandise on account to J. Arnes, $3,100 plus sales tax. Sale No. 229.
	5	Sold merchandise on account to M. Denison, $2,800 plus sales tax. Sale No. 230.
	7	Sold merchandise on account to B. Marshall, $1,900 plus sales tax. Sale No. 231.