Accounting for Liabilities Exercise 7-4 Recognizing sales tax payable LO 7-2 The following selected transactions apply to Easy Stop for November and December 2014. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month. 1. Cash sales for November 2014 were $85,000 plus sales tax of 8 percent. 2. Easy Stop paid the November sales tax to the state agency on December 10, 2014. 3. Cash sales for December 2014 were $98,000 plus sales tax of 8 percent. Required a. Show the effect of the above transactions on a statements model like the one shown below. Assets = Liabilities + Equity Income Statement Cash = Sales Tax Pay. + Com. Stk. + Ret. Earn. Rev. - Exp. = Net Inc. Cash Flow b. What was the total amount of sales tax paid in 2014? c. What was the total amount of sales tax collected in 2014? d. What is the amount of the sales tax liability as of December 31, 2014? e. On which financial statement will the sales tax liability appear