Question
In the following invoice, Your Uniform Co. charged Jump to Health Fitness Center $177.50 for pants and shirts to be used as uniforms for employees
In the following invoice, Your Uniform Co. charged Jump to Health Fitness Center $177.50 for pants and shirts to be used as uniforms for employees at the fitness center. Sales tax of $13.40 was charged on the items. Did Your Uniform Co. charge the correct amount of sales tax? Assume the date is for the current year.
Question 10 options:
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No. Because the seller and buyer are both located in the city of Fort Collins, the seller is not required to charge the city sales tax rate of 3.85%. The sales tax rate should have been 3.7% which is equal to the the CO state rate of 2.9% + Larimer County rate of 0.8%.
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Yes. A rate of 7.55% was charged on the invoice which equals the CO state rate of 2.9% + Larimer County rate of 0.8% + Fort Collins City rate of 3.85%.
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Yes. A rate of 3.7% was charged on the invoice which equals the CO state rate of 2.9% + Larimer County rate of 0.8%.
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No. Your Uniform Co. should not have charged any sales tax to Jump to Health Fitness Center because the purchase was for uniforms to be used for business purposes.
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen and Peter Brewer
14th edition
978-0078111006
