What was the total amount of sales tax paid in 2014

Reference no: EM131810111

The following selected transactions apply to Easy Stop for November and December 2014. 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 2014 were $85,000 plus sales tax of 8 percent.

2. Easy Stop paid the November sales tax to the state agency on December 10, 2014.

3. Cash sales for December 2014 were $98,000 plus sales tax of 8 percent.

a. Show the effect of the above transactions on a statements model like the one shown below.

In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA).

Use NA to indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.)

b. What was the total amount of sales tax paid in 2014?

c. What was the total amount of sales tax collected in 2014?

d. What is the amount of the sales tax liability as of December 31, 2014?

Reference no: EM131810111

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