Question

Calculator Merchandise is sold for cash. The selling price of the merchandise is $3,700 and the sale is subject to a 7% state sales tax. The journal entry to record the sale would include credit to Ca. Cash for $3,700 b. Sales Tax Payable for $259 c. Sales for $3.959 d. Sales for $3,700

Answer 1

Solution 1:

The journal entry to record sales would include "Debit cash $3,959; credit sales $3,700 and credit Sales tax payable $259"

Hence option b and d are correct.

Solution 2:

Computation of ending inventory COGS under LIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Nov	24	$20.00	$480.00	0	$0.00	$0.00	0	$0.00	$0.00	24	$20.00	$480.00
4-Nov	24	$20.00	$480.00	0	$0.00	$0.00	9	$20.00	$180.00	15	$20.00	$300.00
10-Nov	15	$20.00	$300.00	35	$22.00	$770.00	0	$0.00	$0.00	15	$20.00	$300.00
										35	$22.00	$770.00
17-Nov	15	$20.00	$300.00	0	$0.00	$0.00	19	$22.00	$418.00	15	$20.00	$300.00
	35	$22.00	$770.00							16	$22.00	$352.00
30-Nov	15	$20.00	$300.00	21	$22.00	$462.00	0	$0.00	$0.00	15	$20.00	$300.00
	16	$22.00	$352.00							37	$22.00	$814.00
Total									$598.00	52		$1,114.00

Hence option b is correct.