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Homework answers / question archive / Cortex Technology operates retail stores throughout the? tri-state area
Cortex Technology operates retail stores throughout the? tri-state area. The? company's sales are subject to a 6?% sales tax payable to the state and county government. At the end of the current? year, Cortex reported accounts receivable of $5,618,000 for credit? sales, which includes the sales value of the merchandise sold plus the sales taxes.
a) Prepare the journal entry to record the sales taxes Cortex remitted to the state and county taxing jurisdictions.
| Journal Entries: | |||
| Date | Account Titles and Explanation | Debit | Credit |
| Accounts Receivable | 5618000 | ||
| Sales Revenue (5618000/1.06) | 5300000 | ||
| Sales Tax Payable (5300000*6%) | 318000 | ||
| (Being entry made to record accounts receivables | |||
| and sales tax payable on sale is 6%) | |||
| Sales Tax | 318000 | ||
| Cash | 318000 | ||
| (Being entry made to record sales tax paid | |||
| to local jurisdiction or authority at the rate of 6%) | |||
