Problem: The University book store sells books and other supplies to students in a state where the sales tax rate is 7 percent. The University Book Store engaged in the following transactions for 2012. Sales tax of 7% is collected on all sales.
1. Book sales, not including sales tax amounted to $275,000.00 cash.
2. Cash sales of miscellaneous items in 2012 were $150,000.00, not including tax.
3. Cost of goods sold amounted to $210,000.00 for the year
4. Paid $130,000.00 in operating expense for the year
5. Paid the sales tax collected to the State agency.
Required:
Q1. What is the total amount of sales tax the University book store collected and paid for the year?
Q2. What was the University Book Store's net income for the year?