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Good Day,
please assist with the below;
a business commenced with $1000 capital. inventories costing $800 are purchased on credit and half are sold for $1000 plus sales tax 17.5%, the customer paying cash at once. what will the account equation be after these transactions?
note it does not state that the purchases for $800 were net of sales or not
The question should have made it clear. Are you sure that nothing more was said (and presumably you have an answer in the same book in which you found the question, and so it should be clear from the answer what they have assumed. However, again, the question should make it clear).
I assume that you are using a Revision Kit from one of the ACCA approved publishers (BPP and Kaplan) – if not, then you should make sure you buy one. If it is from the BPP Revision Kit then tell me which question so that I can check for myself.
However, the question you have asked is exactly the same as the question in another post to which you have added the same post as you have posted here, except for the fact that the original question specifically told you about sales tax on the purchases (as would a question like this in the exam).
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