Raleigh Company Billed Its Customers a Total of $1,155,000 for the Month

question 33

Essay

Raleigh Company billed its customers a total of $1,155,000 for the month of November. The total includes a 5% state sales tax.
Required:
a. Prepare the journal entry to record the revenue and related liabilities for the month.
b. Prepare the journal entry to record the sales tax remittance to the state.

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Definitions:

Net Income

The total profit or earnings of a company after all expenses and taxes have been deducted from revenues.

Accrued Interest Payable

Interest that has been incurred but not yet paid during a given accounting period, representing a liability on the balance sheet.

Interest Expense

Expenses an entity faces for using borrowed money over a specific duration.