Required Information [The following Information applies to the questions displayed below.] 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. 1. Cash sales for November Year 1 were $65,500 plus sales tax of 7 percent. 2. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1. 3. Cash sales for December Year 1 were $82,500 plus sales tax of 7 percent. Required a. Record the effect of the given transactions in a horizontal statements model. Note: In the Cash Flow column, use the Initials "OA" for operating activities, "FA" for financing activities, and "IA" for Investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. Assets Event Cash 1. 2. 3. = = Liabilities Sales Tax Payable ++ TOPECA SUPPLY Horizontal Statements Model Stockholder's Equity Income Statement Statement of Common + Stock Retained Earnings Revenue Expense Net Income Cash Flows + = =

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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Ashvinbhai 

Required Information
[The following Information applies to the questions displayed below.]
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.
1. Cash sales for November Year 1 were $65,500 plus sales tax of 7 percent.
2. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1.
3. Cash sales for December Year 1 were $82,500 plus sales tax of 7 percent.
Required
a. Record the effect of the given transactions in a horizontal statements model.
Note: In the Cash Flow column, use the Initials "OA" for operating activities, "FA" for financing activities, and "IA" for Investing
activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input.
Assets
Event
Cash
1.
2.
3.
=
=
Liabilities
Sales Tax
Payable
++
TOPECA SUPPLY
Horizontal Statements Model
Stockholder's Equity
Income Statement
Statement of
Common
+
Stock
Retained
Earnings
Revenue
Expense
Net Income
Cash Flows
+
=
=
Transcribed Image Text:Required Information [The following Information applies to the questions displayed below.] 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. 1. Cash sales for November Year 1 were $65,500 plus sales tax of 7 percent. 2. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1. 3. Cash sales for December Year 1 were $82,500 plus sales tax of 7 percent. Required a. Record the effect of the given transactions in a horizontal statements model. Note: In the Cash Flow column, use the Initials "OA" for operating activities, "FA" for financing activities, and "IA" for Investing activity. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input. Assets Event Cash 1. 2. 3. = = Liabilities Sales Tax Payable ++ TOPECA SUPPLY Horizontal Statements Model Stockholder's Equity Income Statement Statement of Common + Stock Retained Earnings Revenue Expense Net Income Cash Flows + = =
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