- This topic has 3 replies, 2 voices, and was last updated 6 years ago by
.
- Posts
(12)All the sales of Gail, a retailer, were made at a price inclusive of sales
tax at the standard rate of 17.5% and all purchases and expenses bore
sales tax at the standard rate. For the three months ended 31 March
2005 gross sales were $23,500, purchases were $12,000 (net) and
expenses $800 (net).
A $1,260
B $1,400
C $1,594
D $1,873I get 1400.I’ve only calculate tax on purchases and sales,and then find that tax due to tax authorities is 1400..but in answer they also calculate tax on expenses and get answer 1260
Why do we calculate tax on expenses?can you explain pleaseThe tax payable is the tax on all sales, less all the tax suffered. It is the tax suffered on everything – not just on purchases, but also on expenses and on purchases of non-current assets.
This is explained in my free lectures on sales tax. The lectures are a complete free course and cover everything needed to pass the exam well.
- The topic ‘Sales tax 3’ is closed to new replies.