Using T accounts for Cash, Account Receivable, Sales Tax Payable, Sales, Sales Returns and Allowances, and Sales
Question:
Using T accounts for Cash, Account Receivable, Sales Tax Payable, Sales, Sales Returns and Allowances, and Sales Discounts enter the following sales transactions. Use a new set of accounts for each pair, 1-5.
1. No sales tax.
(a) Merchandise is sold for $320 cash.
(b) Merchandise is sold on account for $385.
(c) Payment is received for merchandise sold on account.
2. 5% sales tax.
(a) Merchandise is sold for $320 cash plus sales tax.
(b) Merchandise is sold on account for $385 plus sales tax.
(c) Payment is received for merchandise sold on account.
3. Cash and credit sales, with returned merchandise.
(a) Merchandise is sold for $340 cash.
(b) $30 of merchandise sold for $340 is returned for refund.
(c) Merchandise is sold on account for $280.
(d) $25 of merchandise sold for $280 is returned for a credit.
(e) Payment is received for balance owed on merchandise sold on account.
4. 5% sales tax, with returned merchandise.
(a) Merchandise is sold on account for $400 plus sales tax.
(b) Merchandise sold on account for $60 plus sales tax is returned for a credit.
(c) Balance on account is received in cash.
(d) Merchandise is sold for $260 cash plus sales tax.
(e) $40 of merchandise sold for $260 cash plus sales tax is returned for a refund.
5. Sales on account, with 2/10, n/30 cash discount terms.
(a) Merchandise is sold on account for $450.
(b) The balance is paid within the discount period.
(c) Merchandise is sold on account for $280.
(d) The balance is paid after the discount period.
Expert Answer:
Solution Prepare T Accounts for the given transactions 1 Transactions without sales ... View the full answer
