### Vail Book Mart Financial Transactions OverviewVail Book Mart sells books and other supplies to students in a state where the sales tax rate is 7 percent. The following details the transactions for Year 1, during which this sales tax is applicable to all sales.#### Transactions:1. **Book Sales**: Total sales, excluding sales tax, amounted to $274,000 in cash.2. **Miscellaneous Sales**: Cash sales of various items reached $149,000, excluding tax.3. **Cost of Goods Sold (COGS)**: The total cost was $211,000 for the year.4. **Operating Expenses**: Vail Book Mart incurred $130,000 in operating expenses.5. **Sales Tax Payment**: Collected sales tax was paid to the state agency.#### Requirements:a. **Total Sales Tax Collected and Paid**: Calculate the total amount of sales tax Vail Book Mart collected and paid during the year.b. **Journal Entries Preparation**: Prepare the journal entries for all mentioned transactions.c. **Net Income Calculation**: Determine Vail Book Mart’s net income for the year.#### Instructions:To address these requirements, complete the answers in the designated sections below:- **Required A**: Provide the total amount of sales tax collected and paid for the year.- **Required B**: Detail the journal entries for the transactions.- **Required C**: Calculate the net income for the year.

The net income or loss is calculated as difference between sales and total expenses.

Vail Book Mart sells books and other supplies to students in a state where the sales tax rate is 7 percent. Vail Book Mart engaged in the following transactions for Year 1. Sales tax of 7 percent is collected on all sales. 1. Book sales, not including sales tax, for Year 1 amounted to $274,000 cash. 2. Cash sales of miscellaneous items in Year 1 were $149,000, not including tax. 3. Cost of goods sold was $211,000 for the year. 4. Paid $130,000 in operating expenses for the year. 5. Paid the sales tax collected to the state agency. Required a. What is the total amount of sales tax Vail Book Mart collected and paid for the year? b. Prepare the journal entries for the preceding transactions. c. What is Vail Book Mart's net income for the year?

Vail Book Mart sells books and other supplies to students in a state where the sales tax rate is 7 percent. Vail Book Mart engaged in the following transactions for Year 1. Sales tax of 7 percent is collected on all sales. 1. Book sales, not including sales tax, for Year 1 amounted to $274,000 cash. 2. Cash sales of miscellaneous items in Year 1 were $149,000, not including tax. 3. Cost of goods sold was $211,000 for the year. 4. Paid $130,000 in operating expenses for the year. 5. Paid the sales tax collected to the state agency. Required a. What is the total amount of sales tax Vail Book Mart collected and paid for the year? b. Prepare the journal entries for the preceding transactions. c. What is Vail Book Mart's net income for the year?

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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