During December, Far West Services makes a $1,600 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.5%. (Note: the sales tax amount is in addition to the credit sale amount.) Record sales and sales tax payable. Journal Entry Worksheet

Journal Entry of Far West Services

Dr Account Receivable 1,736

(1,600+136)

Cr Sales Revenue 1,600

Cr Sales tax payable 136

Explanation:

Since Far West Services makes a $1,600 credit sale this means we have to Debit Account Receivable with 1,736 (1,600+136) and Credit Sales Revenue with 1,600 as well as Credit Sales tax payable with 136.

Calculation of Sales tax payable

State sales tax rate is 6% + Local sales tax rate is 2.5%. =8.5%

1,600 X 0.0825%

= 136

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answer; whoever is willing and able to pay the price;