6. Gordon is a sole trader. On 1 September 20X9 the opening balance on Gordon's sales tax account is $5,250 credit. During the month he makes sales net of sales tax of $62,150 and purchases inclusive of sales tax of $71,940. The rate of sales tax is 10%. LA
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Answer:
At the start of the month they owed $5,250 to the state.
At the start of the month they owed $5,250 to the state.During the month they charged tax on their sales of 10% x $62,150 = $6,215 and this is owed to the state.
At the start of the month they owed $5,250 to the state.During the month they charged tax on their sales of 10% x $62,150 = $6,215 and this is owed to the state.During the month they also suffered tax on their purchases of 10/110 x $71,940 = $6,540 and this reduces the amount owed to the state.
At the start of the month they owed $5,250 to the state.During the month they charged tax on their sales of 10% x $62,150 = $6,215 and this is owed to the state.During the month they also suffered tax on their purchases of 10/110 x $71,940 = $6,540 and this reduces the amount owed to the state.Therefore at the end of the month they are owing to the state 5,250 + 6,215 – 6,540 = $4,925. It is owing to the state and is therefore a credit balance.