Moreno Company Began Year 1 with a Balance of $300

question 99

Short Answer

Moreno Company began Year 1 with a balance of $300 in Sales Tax payable. During the year, the company recorded taxable sales of $92,500. The ending balance in Sales Tax payable was $445 Moreno's sales tax rate is 4%.
Required:How much sales tax did Moreno collect during Year 1?How much sales tax did Moreno pay during Year 1?

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Definitions:

Variable-Rate Loan

A loan where the interest rate can change over time, typically in relation to an index or benchmark.

Compounded Monthly

A method of calculating interest where the interest earned each month is added to the principal, thereby increasing the amount upon which future interest is calculated.

Compounded Quarterly

Interest calculation where the interest is added to the principal four times a year, allowing future interest to be earned on the prior periods' interest.

Outstanding Balance

The amount of money owed that has not yet been paid back.