Vail Book Mart sells books and other supplies to students in a state where the sales tax rate is 6 percent. Vail Book Mart engaged in the following transactions for Year 1. Sales tax of 6 percent is collected on all sales. Book sales, not including sales tax, for Year 1 amounted to $279,000 cash. Cash sales of miscellaneous items in Year 1 were $151,000, not including tax. Cost of gods sold was $211,000 for the year. Paid $130,000 in operating expenses for the year. Paid the sales tax collected to the state agency. What is the total amount of sales tax Vail Book Mart collected and paid for the year? Prepare the journal entries for the preceding transactions. What is Vail Book Mart's net income for the year?
Vail Book Mart sells books and other supplies to students in a state where the sales tax rate is 6 percent. Vail Book Mart engaged in the following transactions for Year 1. Sales tax of 6 percent is collected on all sales. Book sales, not including sales tax, for Year 1 amounted to $279,000 cash. Cash sales of miscellaneous items in Year 1 were $151,000, not including tax. Cost of gods sold was $211,000 for the year. Paid $130,000 in operating expenses for the year. Paid the sales tax collected to the state agency. What is the total amount of sales tax Vail Book Mart collected and paid for the year? Prepare the journal entries for the preceding transactions. What is Vail Book Mart's net income for the year?
Chapter2: Income Tax Concepts
Section: Chapter Questions
Problem 18P
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Vail Book Mart sells books and other supplies to students in a state where the sales tax rate is 6 percent. Vail Book Mart engaged in the following transactions for Year 1. Sales tax of 6 percent is collected on all sales.
- Book sales, not including sales tax, for Year 1 amounted to $279,000 cash.
- Cash sales of miscellaneous items in Year 1 were $151,000, not including tax.
- Cost of gods sold was $211,000 for the year.
- Paid $130,000 in operating expenses for the year.
- Paid the sales tax collected to the state agency.
- What is the total amount of sales tax Vail Book Mart collected and paid for the year?
- Prepare the
journal entries for the preceding transactions. - What is Vail Book Mart's net income for the year?
Transcribed Image Text:es
Vail Book Mart sells books and other supplies to students in a state where the sales tax rate is 6 percent. Vail Book Mart engaged in
the following transactions for Year 1. Sales tax of 6 percent is collected on all sales.
1. Book sales, not including sales tax, for Year 1 amounted to $279,000 cash.
2. Cash sales of miscellaneous items in Year 1 were $151,000, not including tax.
3. Cost of goods sold was $211,000 for the year.
4. Paid $130,000 in operating expenses for the year.
5. Paid the sales tax collected to the state agency.
Required
a. What is the total amount of sales tax Vail Book Mart collected and paid for the year?
b. Prepare the journal entries for the preceding transactions.
c. What is Vail Book Mart's net income for the year?
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