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Summary Purchase Retailer made cash sales during the month of October of P132,600. The sales are s $7.99
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Summary Purchase Retailer made cash sales during the month of October of P132,600. The sales are s
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Purchase Retailer made cash sales during the month of October of P132Purchase Retailer made cash sales during the month of October of P132,600. The sales are subject to a 6% sales tax that was also collected. would be included in the summary journal entry to reflect the sale transactions? Select on...

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  • October 6, 2024
  • 3
  • 2024/2025
  • Summary

Subjects

  • 506 d debit cash for p132
  • purchase retailer made cash sales during the month
  • 600 the sales are subject to a 6 sales tax that
  • 094 b credit sales tax payable for p7
  • 956 c credit sales tax payable for p7

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Purchase Retailer made cash sales during the month of October of P132,600.

The sales are subject to a 6% sales tax that was also collected. would be

included in the summary journal entry to reflect the sale transactions? Select

one: a. Credit Sales for P125,094. b. Credit Sales Tax Payable for P7,956. c.

Credit Sales Tax Payable for P7,506. d. Debit Cash for P132,600.




Answer & Explanation


To determine the correct journal entry, we need to separate the sales revenue

from the sales tax collected. The total cash received includes both the sales and

the sales tax.


1. Total Cash Received: P132,600


2. Sales Tax Rate: 6%


The formula to find the portion of cash that is actual sales (excluding tax) is:


[ \text{Sales} = \frac{\text{Total Cash Received}}{1 + \text{Sales Tax Rate}} ]


Substituting in our values:

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