Loong Industries Sells Materials on March 16 for $12,000 Cash

Loong Industries sells materials on March 16 for $12,000 cash, subject to 8% sales tax. The cost of the materials sold is $5,700. The revenue portion of the transaction is recorded as:

A) Debit Cash $12,000; credit Sales Taxes Payable $960; credit Sales $11,040.
B) Debit Accounts Receivable $12,960; credit Sales $12,000; credit Sales Taxes Payable $960.
C) Debit Cash $12,960; credit Sales $12,000; credit Sales Taxes Payable $960.
D) Debit Sales $12,960; credit Cash $12,000; credit Sales Taxes Payable $960.
E) Debit Cash $12,960; credit Sales $12,960.

Correct Answer:

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