Question

Question 11 -/1 View Policies Current Attempt in Progress Sheffield Corp. Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $15,370.All sales are subject to a 6 % sales tax. Compute sales taxes payable. $ Sales taxes payable 870 Make the entry to record sales taxes payable and sales. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit Debit Account Titles and Explanation Date Mar. 16

Answer 1

Ans. 1	Total sales is the sum of sales revenue and sales tax payable. So, we
	need separate the part of sales revenue from total sales to compute
	the sales tax payable.
	*Calculation of sales tax:
	Total sales included tax (given)	$15,370
	Less: Sales exclusive of tax   [$15,370 / (1+0.06)]	$14,500
	Sales tax payable	$870
Ans. 2
Date	Account Title and Explanation	Debit	Credit
16-Mar	Cash	$15,370
	Sales revenue	$14,500
	Sales tax payable		$870
	(To record sales revenue and sales tax payable)