Furniture World is required by law to collect and remit sales taxes to the state. If Furniture World has $78,000 of cash sales that are subject to a 6% sales tax, what is the journal entry to record the cash sales?
A. Debit Sales Taxes Payable $4,680; debit Cash $73,220; credit Sales $78,000.
B. Debit Cash $78,000; credit Sales $78,000; and record the taxes when paid.
C. Debit Accounts Receivable $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680.
D. Debit Cash $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680.
E. Debit Cash $78,000; credit Sales $73,320; credit Sales Taxes Payable $4,680.
Answer: D
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