Prepare the entry to record Ayayai's cash sales. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Cash Sales Revenue Sales Taxes Payable Debit 23940 Credit
Prepare the entry to record Ayayai's cash sales. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Cash Sales Revenue Sales Taxes Payable Debit 23940 Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Prepare the Entry to Record Ayayai's Cash Sales:**
*(If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)*
| **Account Titles and Explanation** | **Debit** | **Credit** |
|------------------------------------|-----------|------------|
| Cash | 23,940 | |
| Sales Revenue | | |
| Sales Taxes Payable | | |

Transcribed Image Text:**Ayayai Corporation Sales Transaction Entry**
**Scenario:**
Ayayai Corporation made credit sales of $27,000, which are subject to a 5% sales tax. Additionally, the corporation made cash sales totaling $23,940, including the 5% sales tax.
**Instructions:**
Prepare the entry to record Ayayai’s credit sales. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when an amount is entered. Do not indent manually. List all debit entries before credit entries.
**Journal Entry Table:**
| Account Titles and Explanation | Debit | Credit |
|--------------------------------|--------|--------|
| Accounts Receivable | 28350 | |
| Sales Revenue | | 27000 |
| Sales Taxes Payable | | 1350 |
**Explanation of the Table:**
- **Accounts Receivable** is debited by $28,350. This represents the total amount due from customers on credit sales, including sales tax.
- **Sales Revenue** is credited by $27,000. This reflects the total sales revenue before sales tax.
- **Sales Taxes Payable** is credited by $1,350, representing the sales tax liability computed as 5% of the sales revenue.
These entries ensure the company's books accurately reflect the credit sales and related sales tax liability.
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