FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Stork Enterprises delivers care packages for special occasions. They charge $55 for a small package, and $85 for a large package. The sales tax rate is 7%. During the month of May, Stork delivers 48 small packages and 25 large packages.
A. What is the total tax charged to the customer per small package? What is the overall charge per small package? If required, round your answers to two decimal places.
Total tax charged $
per small package
Overall charge
per small package
B. What is the total tax charged to the customer per large package? What is the overall charge per large package? If required, round your answers to two decimal places.
Total tax charged $
per large package
Overall charge
per large package
C. How much sales tax liability does Stork Enterprises have for the month of May? If required, round your answers to two decimal places.
$
D. What account is used to recognize this tax situation for the month of May?
Sales Tax Payable
E. When Stork remits payment to the sales tax governing body, what happens to the sales tax liability?
✔would decrease - ✓
Sales Tax Payable
✓
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