Moreno Company began Year 1 with a balance of $300 in Sales Tax payable. During the year, the company recorded taxable sales of $92,500. The ending balance in Sales Tax payable was $445. Moreno's sales tax rate is 4%.Required:a) How much sales tax did Moreno collect during Year 1?b) How much sales tax did Moreno remit (pay to taxing authority) during Year 1?
What will be an ideal response?
a) $3,700
Sales tax collected = Sales of $92,500 × Tax rate of 4% = $3,700
b) $3,555
Ending balance of sales tax payable = Beginning balance of sales tax payable + Sales tax collected ? Sales tax remitted
$445 = $300 + $3,700 ? Sales tax remitted
Sales tax remitted = $3,700 + $300 ? $445 = $3,555
You might also like to view...
The product positioning strategy based on how a product is used is the positioning approach of:
A) product attributes B) competitors C) use or application D) price-quality relationship
When a company has available-for-sale debt securities, the interest income pattern in the income statement is identical to the interest income pattern under the held-to-maturity classification.
Answer the following statement true (T) or false (F)
Management would not use the statement of cash flows to
a. assess the liquidity of the business. b. determine dividend policy. c. evaluate the effects of major policy decisions involving investments and financing. d. determine the financial position of the company.
Federal courts do not have the power to grant injunctions in labor disputes because of the ________
Fill in the blanks with correct word