COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
4th Edition
ISBN: 9781260255157
Author: Haddock
Publisher: MCG CUSTOM
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Question
Chapter 7, Problem 8DQ
To determine
Explain how to measure the sales tax. Also, determine when the retailer is allowed to record both the selling price and the tax in the same account.
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TireCo is a retail store in a state that imposes a 6 percentsales tax. Would you expect to find sales tax expense andsales tax payable in TireCo’s financial statements? Explain.
Like all retailers, Hollister is required to collect sales tax to be remitted to state and local government authorities. Assume a local store has cash proceeds from sales of $5,325, including $325 in sales tax. What is the sales tax rate? Provide the journal entry to record the proceeds.
Which of the following accounts is credited by the seller when tax is collected on retail sales?
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Chapter 7 Solutions
COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
Ch. 7 - What is the name of the account used to record...Ch. 7 - What is a sales return? What is a sales allowance?Ch. 7 - Prob. 1.3SRQCh. 7 - Prob. 1.4SRECh. 7 - Prob. 1.5SRECh. 7 - Prob. 1.6SRACh. 7 - Prob. 2.1SRQCh. 7 - Prob. 2.2SRQCh. 7 - Prob. 2.3SRQCh. 7 - Prob. 2.4SRQ
Ch. 7 - Prob. 2.5SRECh. 7 - Prob. 2.6SRECh. 7 - Prob. 2.7SRACh. 7 - Prob. 1CSRCh. 7 - Prob. 2CSRCh. 7 - Prob. 3CSRCh. 7 - Prob. 4CSRCh. 7 - Prob. 5CSRCh. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQCh. 7 - Prob. 11DQCh. 7 - Prob. 12DQCh. 7 - Prob. 13DQCh. 7 - Prob. 14DQCh. 7 - Prob. 15DQCh. 7 - Prob. 1ECh. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Record the following transactions of Fashion Park...Ch. 7 - Prob. 5ECh. 7 - Prob. 6ECh. 7 - Prob. 7ECh. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 1PACh. 7 - Prob. 2PACh. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - Prob. 5PACh. 7 - Prob. 6PACh. 7 - Prob. 1PBCh. 7 - Prob. 2PBCh. 7 - INSTRUCTIONS 1. Open the general ledger accounts...Ch. 7 - The Urban Florist is a wholesale shop that sells...Ch. 7 - Prob. 5PBCh. 7 - Prob. 6PBCh. 7 - Prob. 1CTPCh. 7 - Tony Zendejas is the owner of Housewares Galore, a...Ch. 7 - Prob. 1MFCh. 7 - Prob. 2MFCh. 7 - Prob. 3MFCh. 7 - Prob. 4MFCh. 7 - Prob. 5MFCh. 7 - Prob. 6MFCh. 7 - Prob. 7MFCh. 7 - Why should management insist that all sales on...Ch. 7 - Prob. 1ED
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Similar questions
- The seller collects sales taxes from the customer at the time of sale and reports the sales taxes as a. Sales tax expense. b. Sales tax revenue. c. Sales tax receivable. d. Sales tax payable.arrow_forwardIV. Value Added Tax (VAT) - A retailer buys an article from the wholesaler at OMR 1,800 and the wholesaler charges a sales tax at the rate prescribed rate of 5%. The retailer fixes the price at OMR 2,000 and charges sales tax at the same rate. Apply VAT system of sales tax calculation to answer the following. A. Find the input tax and output tax for the retailer. B. Discuss why the government would impose VATarrow_forwardTennis Shoe Warehouse operates in a state with a 6.5% sales tax. For convenience, Tennis Shoe Warehouse credits Sales Revenue for the total amount (selling price plus sales tax) collected from each customer. If Tennis Shoe Warehouse fails to make an adjustment for sales taxes, ……Select one:a. net income will be understated and liabilities will be overstated.b. net income will be overstated and liabilities will be overstated.c. net income will be understated and liabilities will be understated.d. net income will be overstated and liabilities will be understated.arrow_forward
- In QuickBooks Online, what 4 data points do you need to set up sales tax for a client who only does business in their home state?arrow_forwardExplain why the merchandiser is not paying sales tax. Use the invoice that is below.arrow_forwardA wholesaler sells an item to a retailer for OMR 440. Tax charged is 5% The retailer sells the same item to the customer for OMR 480. Find the VAT paid by the retailer.arrow_forward
- We record a sale on account that involves sales tax in which journal?arrow_forwardA company receives $696, of which $56 is for sales tax. The journal entry to record the sale would include a Select one: a. debit to Sales Tax Expense for $56. b. debit to Sales Taxes Payable for $56. C. debit to Sales Revenue for $696. d. debit to Cash for $696.arrow_forwardTennis Shoe Warehouse operates in a state with a 6.5% sales tax. For convenience, TennisShoe Warehouse credits Sales Revenue for the total amount (selling price plus sales tax) collectedfrom each customer. If Tennis Shoe Warehouse fails to make an adjustment for sales taxes,a. net income will be understated and liabilities will be overstated.b. net income will be overstated and liabilities will be overstated.c. net income will be overstated and liabilities will be understated.d. net income will be understated and liabilities will be understated.arrow_forward
- Merchandise is sold for cash. The selling price of the merchandise is $5,100 and the sale is subject to a 6% state sales tax. The journal entry to record the sale would include a credit to a.Cash for $5,100 b.Cash for $5,406 c.Sales Tax Payable for $306 d.Sales for $5,406arrow_forwardExcise and sales tax calculations. A. What amount of revenue is recorded? B. Prepare a general journal entry to record the transaction on the books of Clifford company. Round all answers to the nearest dollar. The options for the description dropbox are: accounts receivable, excise tax payable, sales tax payable, sales.arrow_forwardUse Exhibit 18-1 to determine the sales tax (in $) and calculate the total purchase price (in $) for the item. (Round your answers to the nearest cent.) Sales Selling Price Total Item Tax Purchase Price Candy bar $0.66 $arrow_forward
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