Journal Entry for Cash Purchase with Sale Tax
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XYZ company purchased inventory in cash
for $110,000 ( amount included sale tax),
with an associated 10% sales tax.
The journal entry is:
Amount before sale tax =$110,000/1.1
=$100,000
Dr. Purchase / Inventory…………$100,000
Dr. Sale Tax…………………………..$10,000
Cr. Account Payable…………………………$110,000
Journal Entry for Cash Purchase with Sale Tax
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