Merchandise is sold for cash. The selling price of the merchandise is $3,200 and the sale is subject to a 5% state sales tax. The journal entry to record the sale would include a credit to a. Cash for $3,200 b. Sales for $3,360 c. Sales Tax Payable for $160 d. Sales for $3,040

Question

Business

Azul Haney

11 February, 10:10

Merchandise is sold for cash. The selling price of the merchandise is $3,200 and the sale is subject to a 5% state sales tax. The journal entry to record the sale would include a credit to a. Cash for $3,200 b. Sales for $3,360 c. Sales Tax Payable for $160 d. Sales for $3,040

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Answers (1)

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Amaris Buckley · Answer 1

Option (c) is correct.

Explanation:

Given that,

Selling price of the merchandise = 3,200

State sales tax = 5%

Sales tax payable:

= Sales revenue x Sales tax rate

= $3,200 * 5%

= $160

Therefore, the journal entry is as follows:

Cash A/c Dr. $3,360

To sales $3,200

To sales tax $160

(To record the sale)