During 2000, Caran Cutlery Company made cash sales of $90,000, on which a 6% sales tax was imposed. The sales tax was collected from the customer at the time of each sale. By the end of the year, 75% of the sales tax collected had been remitted to the state.

Required: (1) Using T-accounts, show how Caran Cutlery should record the preceding events for 2000.

(2) Show how Caran Cutlery would report the sales tax liability at the end of 2000.

 TYK-1