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In July 20X2, a company sold goods at standard sales tax rate with a net value of $200,000, goods exempt from sales tax with a value of $50,000 and goods at zero sales tax rate with a net value of $25,000. The purchases in July 20X2, which were all subject to sales tax, were $161,000, including sales tax. Assume that the rate of sales tax is 15%. The difference between sales tax input tax and sales tax output tax is A Dr $9,000 B Cr $5,850 C Cr $9,000 D None of these

In July 20X2, a company sold goods at standard sales tax rate with a net value of $200,000, goods exempt from sales tax with a value of $50,000 and goods at zero sales tax rate with a net value of $25,000. The purchases in July 20X2, which were all subject to sales tax, were $161,000, including sales tax. Assume that the rate of sales tax is 15%. The difference between sales tax input tax and sales tax output tax is A Dr $9,000 B Cr $5,850 C Cr $9,000 D None of these

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter8: Current And Contingent Liabilities
Section: Chapter Questions
Problem 7MCQ
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In July 20X2, a company sold goods at standard sales tax rate with a net value of $200,000, goods exempt

from sales tax with a value of $50,000 and goods at zero sales tax rate with a net value of $25,000. The

purchases in July 20X2, which were all subject to sales tax, were $161,000, including sales tax. Assume that

the rate of sales tax is 15%.

The difference between sales tax input tax and sales tax output tax is

A Dr $9,000

B Cr $5,850

C Cr $9,000

D None of these

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