Hello! My first visit here, and I'm hoping for some insite. I live in Michigan and purchase items from vendors, many of which are resold. I have some scenerios which seem to totally confuse me.
First, Let's say I purchase an item online which I intend to use for myself, and the vendor does not charge me sales tax. I need to somehow enter the amount of the tax to be paid on these purchases since I owe it to the state after the end of the year.
My next scenerio is: Let's say I purchase an item from an online vendor and the vendor charges me the applicable sales tax. Let's say I pay $1.50 in sales tax on the purchase. This item is a item I will resell and when I sell it, I charge the customer $2.00 in sales tax on the sale. Because I paid $1.50 when I purchased it, I get credit for this from the state and so I should only owe the state $.50 when it is all said and done. How would this type of entry be made? While entering the check or by using the G/L? What accounts and would they be debits or credits?
Any input you might have would be appreciated beyond words!
PS: I am using Sage 50 2014
Wayne
First, Let's say I purchase an item online which I intend to use for myself, and the vendor does not charge me sales tax. I need to somehow enter the amount of the tax to be paid on these purchases since I owe it to the state after the end of the year.
My next scenerio is: Let's say I purchase an item from an online vendor and the vendor charges me the applicable sales tax. Let's say I pay $1.50 in sales tax on the purchase. This item is a item I will resell and when I sell it, I charge the customer $2.00 in sales tax on the sale. Because I paid $1.50 when I purchased it, I get credit for this from the state and so I should only owe the state $.50 when it is all said and done. How would this type of entry be made? While entering the check or by using the G/L? What accounts and would they be debits or credits?
Any input you might have would be appreciated beyond words!
PS: I am using Sage 50 2014
Wayne