1. a. Record the above transactions in general journal form.
The following selected transactions apply to Book Yard Store for November and December
Year 1. November was the first month of operations. Sales tax is collected at the time of sale
but is not paid to the state sales tax agency until the following month.
1. Cash sales for November Year 1 were $100,000 plus sales tax of 9 percent.
2. Book Yard paid the November sales tax to the state agency on December 7, Year 1.
3. Cash sales for December Year 1 were $80,000 plus sales tax of 9 percent.
Required
a. Record the above transactions in general journal form.
b. Show the effect of the above transactions on a horizontal statements model.
c. What was the total amount of sales tax paid in Year 1?
d. What was the total amount of sales tax collected in Year 1?
e. What is the amount of the sales tax liability as of December 31, Year 1?
f. What amount of sales tax expense will be reported on the Year 1 income statement?
In this exercise, we will record transactions in the general journal. We will also show the effect of these transactions using a horizontal statements model.