Help Need w/ Gross / Net Sales

[ConfusedPA]

Hello everyone. So I am looking for some help maybe understanding how to record gross sales vs net sales.

I am located in the US and my current payment system is Paypal. Paypal takes out a percentage of each transaction that you receive money from via Paypal.

My question is this: How do I record my gross sales figure for a specific transaction if it includes sales tax? I was told that I do not record sales tax in my gross sales figure.

Total Amount of Transaction (Sale Price + Shipping + Sales Tax): $62.49
Paypal Fee: 2.11
Sales Tax: 3.54

If I go with what I was told, my Net Sales would be $58.95 (total amount - sales tax).

But Paypal shows my net as $60.38.. when recording my gross and net figures in my own system, can my Gross be lower then my net?

How do I record this figure when paypal is taking its percentage on ALL of the money (including sales tax)..

Would gross be: 58.95 w/ net being: $60.38

A bit confused on how to record this, any help is greatly appreciated.

 

[Triest123]

Hello everyone. So I am looking for some help maybe understanding how to record gross sales vs net sales.

I am located in the US and my current payment system is Paypal. Paypal takes out a percentage of each transaction that you receive money from via Paypal.

My question is this: How do I record my gross sales figure for a specific transaction if it includes sales tax? I was told that I do not record sales tax in my gross sales figure.

Total Amount of Transaction (Sale Price + Shipping + Sales Tax): $62.49
Paypal Fee: 2.11
Sales Tax: 3.54

If I go with what I was told, my Net Sales would be $58.95 (total amount - sales tax).

But Paypal shows my net as $60.38.. when recording my gross and net figures in my own system, can my Gross be lower then my net?

How do I record this figure when paypal is taking its percentage on ALL of the money (including sales tax)..

Would gross be: 58.95 w/ net being: $60.38

A bit confused on how to record this, any help is greatly appreciated.

Dr Bank $60.38 => (per Paypal account)
Dr Paypal charge $2.11 = > (Expense)
Cr Sales $58.95 => (exclude sale tax)
Cr Sale tax payable $3.54 => Liability (the amount payable to the government)

 

[The Finance Writer]

Perfect accounting answer by Triest123, who correctly ignored what "PayPal shows" as net sales. Other readers of this thread should note how much easier perfect accounting is accomplished by simply examining each component of the transaction. ConfusedPA was headed in the correct direction, but was distracted by what PayPal shows as net sales -- which is not a component of the transaction.