BE 10-3 Bramble Auto Supply does not segregate sales and sales taxes at the time

Question

BE 10-3

Bramble Auto Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $15,392. All sales are subject to a 4% sales tax.

E9-16

Kingbird’s Delivery Company and Overland’s Express Delivery exchanged delivery trucks on January 1, 2019. Kingbird’s truck cost $22,500. It has accumulated depreciation of $15,500 and a fair value of $2,800. Overland’s truck cost $11,500. It has accumulated depreciation of $9,200 and a fair value of $2,800. The transaction has commercial substance.

CT 9-7

Turner Container Company is suffering declining sales of its principal product, nonbiodegradeable plastic cartons. The president, Robert Griffin, instructs his controller, Alexis Landrum, to lengthen asset lives to reduce depreciation expense. A processing line of automated plastic extruding equipment, purchased for $3.5 million in January 2019, was originally estimated to have a useful life of 8 years and a salvage value of $300,000. Depreciation has been recorded for 2 years on that basis. Robert wants the estimated life changed to 12 years total, and the straight-line method continued. Alexis is hesitant to make the change, believing it is unethical to increase net income in this manner. Robert says, “Hey, the life is only an estimate, and I’ve heard that our competition uses a 12-year life on their production equipment.”

(a)

Who are the stakeholders in this situation?

Brief Exercise 10-3 Bramble Auto Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $15,392. All sales are subject to a 4% sales tax. Compute sales taxes payable. sales taxes payable SHOW LIST OF ACCOUNTS Make the entry to record sales taxes payable and sales revenue. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Mar. 16 SHOW LIST OF ACCOUNTS

Explanation / Answer

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Please give only 1 question per submission, we are prohibited to answer more than1 question per submission.

Total Sale Value including tax                      15,392 Sale Tax 4% Sale Tax =15392*4%/104% Sale Tax                592 Sale Value =15392-592                      14,800 Account receivable       a/c          Dr                      15,392       To Sale                      14,800       To Sale tax payable                            592 (Being sale recorded) Solution 2 Kingbird company Truck          Dr                         2,800 Accumulated depreciation    Dr                      15,500 Loss on fairvaluation                Dr                         4,200      To Truck                      22,500 (Being truck fair valued and loss recorded) Overland Truck          Dr                         2,800 Accumulated depreciation    Dr                         9,200 Loss on fairvaluation                Dr      To Truck                      11,500      To Gain on Fair valuation                            500 (Being truck fair valued and Gain recognized) Solution 3 Stake holder will be shareholders, Government, Employees

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