Koppernaes Company Has Total Proceeds (Before Segregation of Sales Taxes)

question 123

Multiple Choice

Koppernaes Company has total proceeds (before segregation of sales taxes) from sales of $9540. If the sales tax is 6% the amount to be credited to the account Sales Revenue is:

• A) $9540.
• B) $8968.
• C) $10112.
• D) $9000.

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Definitions:

Present Value Factors

A mathematical formula used to determine the present value of a series of future cash flows by applying a specific discount rate.

Capital Lease

A lease classified as a purchase by the lessee for accounting purposes, where the lessee essentially buys the leased asset.

Incremental Borrowing Rate

The interest rate a lessee would have to pay to borrow on a collateralized basis over a similar term the funds necessary to lease an asset.