Question

On July 5, Williams Company recorded sales of merchandise inventory on account, $55,000. The sales were subject to sales tax of 4%. On August 15, Williams Company paid the sales tax owed to the state from the July 5 transaction. Requirements 1. Journalize the transaction to record the sale on July 5. Ignore cost of goods sold. 2. Journalize the transaction to record the payment of sales tax to the state on August 15.

Short answer

1. Total accounts receivables will be debited by $57,200
2. The sales tax payable is debited with $2,200

Step-by-step solution

Types of Merchandise inventory

First-in-first-out, last-in-first-out, and weighted average are the three various inventory procedures that a merchandiser might use to track their market.

journal Entries

Date	Particulars	Debit	Credit
July, 5	Account receivables	$57,200
	Sales revenue		$55,000
	Sales tax payable		$2,200
	(To record Account receivable and the related sales tax)
August, 15	Sales tax payable	$2,200
	Account payable		$2,200
	(To record account payable for sales tax.)