A. What is the total amount of sales tax collected in 2017? B. What is the total

Question

A. What is the total amount of sales tax collected in 2017? B. What is the total amount of sales tax paid in 2017? (1) Tope Supply Company started operations on November 1, 2017. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month. The following is selected information related to the company: Sales for November 2017 were $165,000, plus sales tax of 7%. November sales tax was paid to the state agency on December 10, 2017. December 2017 sales totaled $180,000, plus sales tax of 7%. Required (show calculations) A. What is the total amount of sales tax collected in 2017? B. what is the total amount of sales tax paid in 2017? C. What is the total amount of the sales tax liability as of December 31, 2017?

Explanation / Answer

Req A: Total amount of sales collected during 2017: Total sales in 2017: November 165000 December 180000 Total sales in 2017: 345000 Sales tax rate 7% Sales tax collected: 345,000*7% = $ 24,150 Req B: Sales tax is paid for november month collection of sales tax onlly. Therefore, Sales tax paid: $ 165,000 *7% = $ 11,550 Req C: Sales tax liability as on Dec2017: Sales tax collected during the year 24150 Less: Sales tax paid 11550 Sales tax liability as on Dec2017: 12600

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