Cantrell Company is required by law to collect and remit sales taxes to the state. If Cantrell has 8,000 of cash sales that are subject to an 8% sales tax, what is the journal entry to record the cash sales? Debit Cash 8,640 credit Sales 8,000 credit Sales Taxes Payable 640. Debit Accounts Receivable 8,640 credit Sales 8,000 credit Sales Taxes Payable 640. Debit Cash 8,000 credit Sales 8,000 and record the taxes when paid. Opebit Sales Taxes Payable 640 debit Cash 7,360 credit Sales 8,000 Debit Cash 8,000 credit Sales 7,360 credit Sales Taxes Payable 640.

To determine the correct journal entry for Cantrell Company's cash sales subject to an 8% sales tax, we need to calculate the total amount collected from customers and how it should be recorded.<br /><br />1. **Calculate the Sales Tax:**<br /> - Sales Tax = Cash Sales × Sales Tax Rate<br /> - Sales Tax = \( \$ 8,000 \times 0.08 = \$ 640 \)<br /><br />2. **Calculate Total Cash Collected:**<br /> - Total Cash Collected = Cash Sales + Sales Tax<br /> - Total Cash Collected = \( \$ 8,000 + \$ 640 = \$ 8,640 \)<br /><br />3. **Journal Entry:**<br /> - Debit Cash for the total amount collected: \( \$ 8,640 \)<br /> - Credit Sales for the amount of sales (excluding tax): \( \$ 8,000 \)<br /> - Credit Sales Taxes Payable for the amount of sales tax: \( \$ 640 \)<br /><br />Therefore, the correct journal entry is:<br />- Debit Cash \( \$ 8,640 \)<br />- Credit Sales \( \$ 8,000 \)<br />- Credit Sales Taxes Payable \( \$ 640 \)<br /><br />This matches the first option provided:<br />- Debit Cash \( \$ 8,640 \); credit Sales \( \$ 8,000 \); credit Sales Taxes Payable \( \$ 640 \).