Answer Posted / sam

to calculate the sales tax, firstly need to know the net value of all the purchases made in that particular month, in the same way u need to calculate the sales net value of the same month.

here net value means the value with out tax.

example: i am calculating 5% tax

150000 7500 157500
here 150000 is net value, 7500 is 5% tax value and 157500 is gross value.

lets take the same amount as total month purchases

now sales: 200000 10000 210000

when calculating sales tax u need to remember is,

input -output
input means purhases and output means sales

we need to take only the tax values i.e 7500-10000= -2500

if the value is in negitive. the firm is liable to pay the tax to the governament.

if the value is in positive, there is no need to pay the tax, the amount will be carried forward to next month

Trial balance as on 31st March, 2014 Particulars Debit Pula Particulars Credit Pula Wages 14 100 Dividends received 4 300 Salaries 13 000 Bank overdraft 41 000 Opening Stock 40 000 Returns 1 000 Machinery 49 000 Creditors 14 200 Investments 30 700 Sales 258 500 Drawings 23 000 Capital 30 000 Purchases 130 000 Returns 2 000 Debtors 18 000 Advertising 13 400 Interest 4 800 Cash 11 000 349 000 ======= 349 000 ======== Additional information: 1. Closing stock is valued at P53 000. 2. Wages include P350 being advance against wages. 3. Wages include P1 000 paid for erection of machinery. 4. A purchase of stationery for P430 has been inadvertently included in the Purchases account. 5. A sale of investments with a book value of P2 600 for P2 500 has been included in the Sales Account. 6. Salaries include P150 per month paid to the proprietor’s domestic servant. 7. Machinery is to be depreciated by 10 per cent. Required: a. The revenue statement (Trading and Profit and Loss Account) for the year ended 31st March 2014 and b. Statement of financial position (Balance Sheet) as on 31st March, 2014.

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