The Mauldin Company makes sales on which a 5% sales tax is assessed. The following summary transactions

Question:

The Mauldin Company makes sales on which a 5% sales tax is assessed. The following summary transactions were made during 2007:
1. Sales for cash of $1,665,400, excluding sales taxes
2. Sales on credit of $2,820,500, excluding sales taxes
3. Sales taxes of $168,220 were paid to the state government during 2007

Required
1. Prepare journal entries to record the preceding transactions.
2. Show how the unpaid sales taxes would be reported on the December 31, 2007 of Mauldin.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...