The following selected transactions apply to Topeca Supply for November and December Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month. Cash sales for November Year 1 were $65,000, plus sales tax of 10 percent. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1. Cash sales for December Year 1 were $79,500, plus sales tax of 10 percent. Required a. Record the preceding transactions in general journal form. b. Show the effect of the preceding transactions on a horizontal statements model like the one shown next. c. What was the total amount of sales tax paid in Year 1?
The following selected transactions apply to Topeca Supply for November and December Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month. Cash sales for November Year 1 were $65,000, plus sales tax of 10 percent. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1. Cash sales for December Year 1 were $79,500, plus sales tax of 10 percent. Required a. Record the preceding transactions in general journal form. b. Show the effect of the preceding transactions on a horizontal statements model like the one shown next. c. What was the total amount of sales tax paid in Year 1?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 6RE: Smith Company is required to charge customers an 8% sales tax on all goods it sells. At the time of...
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The following selected transactions apply to Topeca Supply for November and December Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month.
- Cash sales for November Year 1 were $65,000, plus sales tax of 10 percent.
- Topeca Supply paid the November sales tax to the state agency on December 10, Year 1.
- Cash sales for December Year 1 were $79,500, plus sales tax of 10 percent.
Required
a. Record the preceding transactions in general journal form.
b. Show the effect of the preceding transactions on a horizontal statements model like the one shown next.
c. What was the total amount of sales tax paid in Year 1?
d. What was the total amount of sales tax collected in Year 1?
e. What amount of sales tax expense will be reported on the Year 1 income statement?
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