Alternative ways of recording sales tax

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Reference no: EM1357004

In providing accounting services to small businesses, you encounter the following situations pertaining to cash sales.

Grainger Company rings up sales and sales taxes separately on its cash register. On April 10 the register totals are sales $25,000 and sales taxes $1,750.

Darby Company does not segregate sales and sales taxes. Its register total for April 15 is $13,780, which includes a 6% sales tax.

Prepare the entries to record the sales transactions and related taxes for (a) Grainger Company and (b) Darby Company. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

A) April 10 ~ Grainger Company
Account Description / Debit / Credit

B) April 15 ~ Darby Company
Account Description / Debit / Credit

Reference no: EM1357004

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