Using T accounts for Cash, Accounts 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 part, If required.

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.