- This topic has 4 replies, 2 voices, and was last updated 10 years ago by
.
- Posts
For the 3months ended 31 march 201X Gails gross sales were $23500, purchases were $12000(net) and expenses $800(net).Sales tax rate is 17.5%.
How much is due to the tax authority for the quarter?
Ans:$1260my calculation was:
output tax=$23500X17.5/117.5=$3500
input tax=$12000X17.5%=$2100
#Sales tax payable to authority is $1400(my ans).
#Sales tax relating to expenses is irrecoverable.So sales tax of($800X17.5%)$140 is shown as an expense in the SOPL and that’s why it has no effect to sales tax account.
Am I right sir?Please explain if needed!Why do you say that sales tax for expenses is irrecoverable!!
All sales tax suffered is recoverable, whatever it is suffered on (except for some very special cases which are not examinable in F3 – only in the tax exam F6).
- You must be logged in to reply to this topic.