Required information M10-2 (Algo) Recording Sales and State Tax [LO 10-2] [The following information applies to the questions displayed below.] Grandpa Clocks, Incorporated (GCI), is a retailer of wall, mantle, and grandfather clocks. Assume GCI sells a grandfather clock for $13,000 cash plus 5 percent sales tax. The clock had originally cost GCI $9,000. Assume GCI uses a perpetual inventory system. M10-2 (Algo) Part 1 1. Indicate the effects of the amounts for the above transactions. (Enter any decreases to assets, liabilities, or stockholders equity with a minus sign.) Cash Inventory Assets 13,650 (9,000) = Liabilities Sales Tax Payable Stockholders' Equity 650 + +
Required information M10-2 (Algo) Recording Sales and State Tax [LO 10-2] [The following information applies to the questions displayed below.] Grandpa Clocks, Incorporated (GCI), is a retailer of wall, mantle, and grandfather clocks. Assume GCI sells a grandfather clock for $13,000 cash plus 5 percent sales tax. The clock had originally cost GCI $9,000. Assume GCI uses a perpetual inventory system. M10-2 (Algo) Part 1 1. Indicate the effects of the amounts for the above transactions. (Enter any decreases to assets, liabilities, or stockholders equity with a minus sign.) Cash Inventory Assets 13,650 (9,000) = Liabilities Sales Tax Payable Stockholders' Equity 650 + +
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
M10-2 (Algo) Recording Sales and State Tax [LO 10-2]
[The following information applies to the questions displayed below.]
Grandpa Clocks, Incorporated (GCI), is a retailer of wall, mantle, and grandfather clocks. Assume GCI sells a grandfather
clock for $13,000 cash plus 5 percent sales tax. The clock had originally cost GCI $9,000. Assume GCI uses a perpetual
inventory system.
M10-2 (Algo) Part 1
1. Indicate the effects of the amounts for the above transactions. (Enter any decreases to assets, liabilities, or stockholders equity
with a minus sign.)
Cash
Inventory
Assets
13,650
(9,000)
=
Liabilities
Sales Tax Payable
Stockholders' Equity
650
+
+](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F307d0000-1b7c-4987-8a70-258480990a46%2F109d5ab7-699f-442e-b86b-5158dfaeb689%2F6pt5dvb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
M10-2 (Algo) Recording Sales and State Tax [LO 10-2]
[The following information applies to the questions displayed below.]
Grandpa Clocks, Incorporated (GCI), is a retailer of wall, mantle, and grandfather clocks. Assume GCI sells a grandfather
clock for $13,000 cash plus 5 percent sales tax. The clock had originally cost GCI $9,000. Assume GCI uses a perpetual
inventory system.
M10-2 (Algo) Part 1
1. Indicate the effects of the amounts for the above transactions. (Enter any decreases to assets, liabilities, or stockholders equity
with a minus sign.)
Cash
Inventory
Assets
13,650
(9,000)
=
Liabilities
Sales Tax Payable
Stockholders' Equity
650
+
+
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