A business sells merchandise, $850, plus 4 percent sales tax, and the customer used a bank charge card. The discount charged by the bank is 3 percent of the total of sales plus sales tax. The amount recorded in the Sales Tax Payable Credit column of its cash receipt journal is:

Question

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The sales tax is 4% of $850, which is $34.00. This is the amount recorded in the Sales Tax Payable Credit column.

A Business Sells Merchandise, $850, Plus 4 Percent Sales Tax