Exercise 7-4A (Algo) Recognizing sales tax payable LO 7-2

The following selected transactions apply to Topeca Supply for November and December, Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month.

1. Cash sales for November, Year 1 were $65,500 plus sales tax of 8 percent.
2. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1.
3. Cash sales for December, Year 1 were $82,500 plus sales tax of 8 percent.