BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

Solutions

Chapter
Section
BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
1 views

Sales Tax

Far and Wide Broadband provides Internet connection services to customers living in remote areas. During February 2020, it billed a customer a total of $295,000 before taxes. Weston also must pay the following taxes on these charges:

a. State of Kansas sales tax of 6%

b. Federal excise tax of 0.2%

c. State of Kansas use tax of 0.4%

Required:

Assuming Far and Wide collects these taxes from the customer, what journal entry would Far and Wide make when the customers pay their bills?

To determine

Concept introduction:

Liabilities:

Liabilities are the obligation of the business or amount payable by the business. Liabilities can current or long term. Current liabilities are liabilities payable within the short term or business cycle of the company, for example Accounts payable for purchases and utilities payable. Long term liabilities are liabilities payable in a long period/ years, for example long term loan.

To prepare:

The journal entry at the time of making payment of taxes payable.

Explanation

The journal entry at the time of making payment of taxes payable is explained as follows:

Account Titles Debit Credit
State of Kansas Sales tax Payable (295000*6%) ...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

How accurately can managers plan for future human resources needs?

Foundations of Business (MindTap Course List)

What are some basic database functions that a spreadsheet cannot perform?

Database Systems: Design, Implementation, & Management

How can virtualization save an organization money?

Fundamentals of Information Systems

What should be done to a magnetic chuck when it becomes unevenly worn?

Precision Machining Technology (MindTap Course List)

Solve the following set of equations using the Gaussian method. 2x1+3x1=5x1+x2=10

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

What is structured English?

Systems Analysis and Design (Shelly Cashman Series) (MindTap Course List)

Explain the ethical issues surrounding government search and seizure of computers.

Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)