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 $65,000, plus sales tax of 10 percent. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1. Cash sales for December Year 1 were $79,500, plus sales tax of 10 percent. Required a. Record the preceding transactions in general journal form. b. Show the effect of the preceding transactions on a horizontal statements model like the one shown next. c. What was the total amount of sales tax paid 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. Cash sales for November Year 1 were $65,000, plus sales tax of 10 percent. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1. Cash sales for December Year 1 were $79,500, plus sales tax of 10 percent. Required a. Record the preceding transactions in general journal form. b. Show the effect of the preceding transactions on a horizontal statements model like the one shown next. c. What was the total amount of sales tax paid in Year 1?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
- Cash sales for November Year 1 were $65,000, plus sales tax of 10 percent.
- Topeca Supply paid the November sales tax to the state agency on December 10, Year 1.
- Cash sales for December Year 1 were $79,500, plus sales tax of 10 percent.
Required
a. Record the preceding transactions in general journal form.
b. Show the effect of the preceding transactions on a horizontal statements model like the one shown next.
c. What was the total amount of sales tax paid in Year 1?
d. What was the total amount of sales tax collected in Year 1?
e. What amount of sales tax expense will be reported on the Year 1 income statement?
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