Reference no: EM132990333

Question - The following information is available regarding Merchandise that the R&R Corporation sells to the OBX Corporation Gross Sale of Merchandise on Account (not including sales tax) $120,000 Sales Tax Rate 5.50% Cost of Goods Sold, assume Perpetual Inventory System $34,000.

Required -

1. Record the applicable entry assuming R&R uses a sales tax payable account in the original entry:

A. Debit Accounts Receivable for $86,000 and Credit Sales Revenue for $86,000

B. Debit Accounts Receivable for $126,600, Credit Sales Revenue for $120,000, and Credit Sales Tax Payable for $6,600

C. Debit Accounts Receivable for $126,600 and Credit Sales Revenue for $126,600

D. Debit Accounts Receivable for $92,600, Credit Sales Revenue for $86,000, and Credit Sales Tax Payable for $6,600

2. What is R&R's Net Income for the year based on the provided information?