Reference no: EM132517582

Year 1. 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 Year 1 were $100,000 plus sales tax of 9 percent.

2. Book Yard paid the November sales tax to the state agency on December 7, Year 1.

3. Cash sales for December Year 1 were $80,000 plus sales tax of 9 percent.

Required

Question a. What was the total amount of sales tax paid in Year 1?

Question b. What was the total amount of sales tax collected in Year 1?

Question c. What is the amount of sales tax liability as of December 31, Year 1?

Question d. On which financial statement will the sales tax liability appear?