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Please help me with this question about sale tax.
If the price of good is 700
Cash discount is 10%
So sale tax (10%) is (700-10%)*10% =69And the customer does not pay within discount period.
So, at first, the company will record the following entries
DR Receivable 769
CR Sale 700
CR Sale Tax 69But, when customer does not pay within discount period, how will they record this?
DR Cash 770
CR Receivable 770So how $770 – $769 =$1 be recorded? I am so confused.
Sales tax is not recalculated if they do not get the discount.
So they will not pay 770. The invoice was for 769 and so they will pay 769.
So Dr Cash Cr Receivables with 769.
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