The Following Selected Transactions Relate to Liabilities of Chicago Glass

question 75

Essay

The following selected transactions relate to liabilities of Chicago Glass Corporation for 2018. Chicago's fiscal year ends on December 31.
1. On January 15, Chicago received $7,000 from Henry Construction toward the purchase of $66,000 of plate glass to be delivered on February 6.
2. On February 3, Chicago received $6,700 of refundable deposits relating to containers used to transport glass components.
3. On February 6, Chicago delivered the plate glass to Henry Construction and received the balance of the purchase price.
4. First quarter credit sales totaled $700,000. The state sales tax rate is 4% and the local sales tax rate is 2%.
Required:
Prepare journal entries for the above transactions.

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Definitions:

Removal

A legal term referring to the transfer of a case from one court to another, especially from a state to federal court.

Federal Court

Courts established by the federal government of a country that have jurisdiction over disputes involving federal laws, constitutional questions, or other specific cases defined by law.

Defendant

A party, which could be a person, company, or institution, under accusation or litigation in a judicial setting.

Plaintiff

The party who initiates a lawsuit in a court of law against another party, known as the defendant, in order to seek a legal remedy.