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The following selected transactions apply to Topeca Supply for November and December, Year 1. November was the first month of operations. Sales tax is

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The following selected transactions apply to Topeca Supply for November and December, Year 1. 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, Year 1, were $64,500 plus sales tax of 10 percent. 2. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1. 3. Cash sales for December, Year 1, were $82,000 plus sales tax of 10 percent. Required: a. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statemen cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, clas the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). b. What was the total amount of sales tax paid in Year 1? c. What was the total amount of sales tax collected in Year 1? d. What is the amount of the sales tax liability as of December 31, Year 1? e. On which financial statement will the sales tax liability appear?

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