Question

TR Company conducts business exclusively in State V, which levies a 5 percent sales and use tax on goods purchased or consumed in-state. This year, TR bought equipment in State B. The cost of the equipment was $115,000, and TR paid $6,440 sales tax to State B. TR also bought machinery in State D. The cost of the machinery was $302,500, and TR paid $12,310 sales tax to State D.

A. How much use tax does TR Company owe to State V with respect to the equipment bought in State B?

Precredit use tax:

Sales Tax paid to State B:

Use tax owed to State V

B. How much use tax does TR Company owe to State V with respect to the machinery bought in State D?

Precredit use tax:

Sales Tax paid to State D:

Use tax owed to State V

Answer 1

Given data follows belows:

Levies a percentage of sales = 5 percent.

Cost of the equipment was $115,000.

TR paid sales tax to State B = $6,440.

Cost of the machinery was $302,500,

TR paid an amount of = $12,310

a) Calculating the tax does TR Company owe to State V with respect to the equipment bought in State B.

= $115,000 x 5%.

= $5,750.

Therefore tax was not been paid by company T in state of V.

b) Calculating tax does TR Company owe to State V with respect to the machinery bought in State D.

= $302,500 x 5%

=$15,125

use tax payble in state V= sales tax by state V - sales tax by state D

= $15,125 - $12,310

= $2,815

Use tax owed to State V = $2,815.

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