Suppose the following table applies to the manufacture of wooden desks: Agent Purchase Price Sale Price Value Added Tax Paid (VAT=30%) Logger $0 $55 _________ _________ Manufacturer $55 $150 _________ _________ Retailer $150 $350 __________ _________ a. Complete the table assuming a value-added tax of 30% (subtraction method). What is the total tax revenue? b. How does this revenue compare to a sales tax of 30% levied only on the retailer? Which of the two tax collection methods is easier to avoid? Why?

Suppose the following table applies to the manufacture of wooden desks: Agent Purchase Price Sale Price Value Added Tax Paid (VAT=30%) Logger $0 $55 _____ _ Manufacturer $55 $150 _ _ Retailer $150 $350 ___ a. Complete the table assuming a value-added tax of 30% (subtraction method). What is the total tax revenue? b. How does this revenue compare to a sales tax of 30% levied only on the retailer? Which of the two tax collection methods is easier to avoid? Why?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 29CE: Unearned Sales Revenue Brand Landscaping offers a promotion where a customers lawn will be mowed 20...

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