Kevin Company operates a retail store. All items are sold subject to a 12% value added tax which the entity collects and records as sales revenue. The entity files quarterly sales tax returns when due by the 20th day following the end of the sales quarter. However, in accordance with state requirements, the entity remits value added tax collected by the 20th day of the month following any month if such collections exceed P100,000. The entity takes these payments as credits on the quarterly sales tax return. The value added taxes paid are charged against sales revenue. Following is a monthly summary appearing in the first quarter of 2021 sales revenue account: October November December Debit a. $180,000 b. $216,000 On December 31, 2021, the amount to be reported as valued added taxes payable is: 120,000 C. d. $300,000 $336,000 Credit $1,120,000 784,000 896,000

Kevin Company operates a retail store. All items are sold subject to a 12% value added tax which the entity collects and records as sales revenue. The entity files quarterly sales tax returns when due by the 20th day following the end of the sales quarter. However, in accordance with state requirements, the entity remits value added tax collected by the 20th day of the month following any month if such collections exceed P100,000. The entity takes these payments as credits on the quarterly sales tax return. The value added taxes paid are charged against sales revenue. Following is a monthly summary appearing in the first quarter of 2021 sales revenue account: October November December Debit a. $180,000 b. $216,000 On December 31, 2021, the amount to be reported as valued added taxes payable is: 120,000 C. d. $300,000 $336,000 Credit $1,120,000 784,000 896,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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