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    Adjusting Entry for Sales Tax

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    E13-7 (Adjusting Entry for Sales Tax) During the month of June, Rowling Boutique had cash sales of $233,200 and credit sales of $153,700, both of which include the 6% sales tax that must be remitted to the state by July 15.

    Instructions: Prepare the adjusting entry that should be recorded to fairly present the June 30 financial statements.

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    Solution Preview

    The sales are recorded including the sales tax. The sales tax is collected on behalf of the government and so should be removed from sales ...

    Solution Summary

    The solution explains the adjusting entry for sales tax with calculations.