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 $64,000 plus sales tax of 6 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 6 percent. Required a. Show the effect of the above transactions on a statements model like the one shown as follows. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). If an element is not affected by the event, leave the cell blank. b. What was the total amount of sales tax paid in Year 1? c. What was the total amount of sales tax collected 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. 1. Cash sales for November, Year 1 were $64,000 plus sales tax of 6 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 6 percent. Required a. Show the effect of the above transactions on a statements model like the one shown as follows. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). If an element is not affected by the event, leave the cell blank. b. What was the total amount of sales tax paid in Year 1? c. What was the total amount of sales tax collected in Year 1?

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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