$123$ points

Entity $F$ does not account for sales taxes separately when making sales. The sales tax rate is $7\mathrm{.}5\%.$ If the total amount collected was $$26,875$ how much was the sales tax? Round to the nearest dollar if necessary.

$$1,875$

$$2,016$

$$25,000.$

$$26,875.$

$13$ points

When should a company record a contingent liability in the accounting records?

I. When a loss is probable

II$.$ When the amount of the loss can be reasonably estimated.

Ionly.

II only.

Both I and II$.$

Neither I nor II$.$