Vail Book Mart sells books and other supplies to students in a state where the sales tax rate is 6 percent. Vail Book Mart engaged in the following transactions for Year 1. Sales tax of 6 percent is collected on all sales.Book sales, not including sales tax, for Year 1 amounted to $279,000 cash.Cash sales of miscellaneous items in Year 1 were $151,000, not including tax.Cost of gods sold was $211,000 for the year.Paid $130,000 in operating expenses for the year.Paid the sales tax collected to the state agency.RequiredWhat is the total amount of sales tax Vail Book Mart collected and paid for the year?Prepare the journal entries for the preceding transactions.What is Vail Book Mart's net income for the year? To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations,Daun purchased the stereo systems for $270,000 and sold them for $380,000 cash. She provided her customers with a one-yearwarranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 3percent of sales. During the year, she paid $4,120 cash to replace a defective tuner.Requireda. Prepare an income statement and statement of cash flows for Daun's first year of operation.b. Based on the information given, what is Daun's total warranties liability at the end of the accounting period?Complete this question by entering your answers in the tabs below.Req A1Req A2Rea BBased on the information given, what is Daun's total warranties liability at the end of the accounting period?Total warranties liability< Req A2Req B >

Warranty Expense -Warranty is an Expense estimated to be incurred in the upcoming year. It is a…

Answered: To support herself while attending…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 77P: During the last five months of the year, Dwana opens a new Internet telecommunications business...

See similar textbooks

Related questions

Question

Vail Book Mart sells books and other supplies to students in a state where the sales tax rate is 6 percent. Vail Book Mart engaged in the following transactions for Year 1. Sales tax of 6 percent is collected on all sales.

Book sales, not including sales tax, for Year 1 amounted to $279,000 cash.
Cash sales of miscellaneous items in Year 1 were $151,000, not including tax.
Cost of gods sold was $211,000 for the year.
Paid $130,000 in operating expenses for the year.
Paid the sales tax collected to the state agency.

Required

What is the total amount of sales tax Vail Book Mart collected and paid for the year?
Prepare the journal entries for the preceding transactions.
What is Vail Book Mart's net income for the year?

To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations,
Daun purchased the stereo systems for $270,000 and sold them for $380,000 cash. She provided her customers with a one-year
warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 3
percent of sales. During the year, she paid $4,120 cash to replace a defective tuner.
Required
a. Prepare an income statement and statement of cash flows for Daun's first year of operation.
b. Based on the information given, what is Daun's total warranties liability at the end of the accounting period?
Complete this question by entering your answers in the tabs below.
Req A1
Req A2
Rea B
Based on the information given, what is Daun's total warranties liability at the end of the accounting period?
Total warranties liability
< Req A2
Req B >

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.