Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1.The transactions of a sales tax registered business for the quarter ended 31 March 2020 are as follows: $ Sales (including $50,000 of zero rated

1.The transactions of a sales tax registered business for the quarter ended 31 March 2020 are as follows:

$

Sales (including $50,000 of zero rated items)850, 000 (excluding sales tax)

Expenses (including $2,000 of gross non-business items)662,000 (including sales tax)

The business records show an opening credit balance on the sales tax account of $26, 757 and a closing credit balance of $24, 772.

The rate of sales tax is 20%.

What was the total sales tax paid to the tax authorities in the quarter?

Select one alternative:

  • $ 29,985
  • $ 25,318
  • $ 61,652
  • $ 51,985

2.Transformer Ltd received an invoice for a new machine as follows:

$

List price

150,000

Less: Trade discount

(15,000)

Service agreement (3 years)

3,000

Installation

1,500

Delivery

1,000

Total price

140,500

A further settlement discount of 5% was offered for payment within 14 days.Transformer Ltd took advantage of this and paid the invoice after 10 days.

What amount should be capitalised as "plant and machinery" in the financial statements?

Select one alternative:

  • $137,500
  • $135,000
  • $133,475
  • $130,750

I would like to know the answer and reason.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Paul Marcus Fischer, Rita H Cheng, William James Taylor, Roger Taylor

10th Edition

0324379056, 9780324379051

More Books

Students also viewed these Accounting questions