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 $64,500 plus sales tax of 9 percent. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1. Cash sales for December, Year 1 were $80,000 plus sales tax of 9 percent.       What was the total amount of sales tax collected in Year 1? What is the amount of the sales tax liability as of December 31, Year 1?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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.

 

  1. Cash sales for November, Year 1 were $64,500 plus sales tax of 9 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 $80,000 plus sales tax of 9 percent.

 

 

 

  1. What was the total amount of sales tax collected in Year 1?
  2. What is the amount of the sales tax liability as of December 31, Year 1?
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