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An invoice for carriage outwards was received after the year end for the period 1 November 2008 to 31 January 20X9, amounting to $720 plus sales tax of $126.
The year ends on 31 December.
Sir can you please make me solve it. And please guide whether Sale tax is included or not? As book is not including sale tax.Book is doing like this:
(2/3) x 720 = 480.
Why sale tax is not added?1/11/2008 to 31/1/2009 is three months of which two (Nov, Dec) are for y/e 31/11/2008. So a factor of 2/3 is relevant.
Sales tax is not added (I am assuming this is like UK VAT where a business is registered for VAT) because the sales tax can be recovered from the government. If this is not the case, sales tax would be added.
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