Exercise 7-4 Recognizing sales tax payable LO 7-2 [The following information applies to the questions displayed below.] The following selected transactions apply to Topeca Supply for November and December 2018. 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 2018 were $65,000 plus sales tax of 7 percent. 2. Topeca Supply paid the November sales tax to the state agency on December 10, 2018. 3. Cash sales for December 2018 were $83,500 plus sales tax of 7 percent. Show the effect of the above transactions on a statements model like the one shown as follows. In the Cash Hlow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA) an element is not affected by the event, leave the cell blank. (Enter any decreases to account balances and cash outflows with a minus sign.) TOPECA SUPPLY Horizontal Statements Model Stockholder's Equity Assets Liabilities Income Statement Statement of Cash Flows vent Sales Tax Retained + Common Cash Revenue Expense Net Income = Payable Stock Earnings 1 + 2 | 3 b. What was the total amount of sales tax paid in 2018? Sales tax paid c. What was the total amount of sales tax collected in 2018? Sales tax collected d. What is the amount of the sales tax liability as of December 31, 2018? Sales tax liability e. On which financial statement will the sales tax liability appear? The liability is shown on the