Exercise 9-4A Recognizing sales tax payable LO 9-2 The following selected transa
ID: 2460756 • Letter: E
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Exercise 9-4A Recognizing sales tax payable LO 9-2 The following selected transactions apply to Topeca Supply for November and December 2016. 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 2016 were $165,000 plus sales tax of 7 percent. 2. Topeca Supply paid the November sales tax to the state agency on December 10, 2016. 3. Cash sales for December 2016 were $180,000 plus sales tax of 7 percent. Required a. Record the above transactions in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record the above transactions in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Show the effect of the above transactions on a horizontal statements model like the one shown below.(Enter any decreases to account balances with a minus sign. In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, or NA for not affected.)
What was the total amount of sales tax paid in 2016?
What was the total amount of sales tax collected in 2016?
a.Record the above transactions in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b.Show the effect of the above transactions on a horizontal statements model like the one shown below.(Enter any decreases to account balances with a minus sign. In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, or NA for not affected.)
c.What was the total amount of sales tax paid in 2016?
d.What was the total amount of sales tax collected in 2016?
e. What amount of sales tax expense will be reported on the 2016 income statement?Explanation / Answer
Answer:
a)
> For November 2016
Cash Dr. 176,550
Sales revenue Cr. 165,000
Sales tax payable Cr. 11,550
> For December 2016
Cash Dr. 192,600
Sales revenue Cr. 180,000
Sales tax payable Cr. 12,600
b) Please provide the format.
c) Total amount of sales tax paid in 2016 = $11,550
d) Total amount of sales tax collected in 2016 = 11,550 + 12,600 = $24,150
e) No entry required.
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