Reference no: EM133066135

Question - A city "piggy-backs" its 3 percent sales tax on top of the state sales tax. During calendar year 2022 the state remits $880,000 to the city for sales taxes collected for the city. On January 25, 2023, the state sends the city $330,000 for sales taxes collected in the fourth quarter of 2022. On March 1, the state sends the city $49,500 for sales taxes applicable to 2022, but sent in by late filers. Historically, the state has sent the city about $33,000 every June for sales taxes applicable to previous years that either trickles in from additional late filers or that results from tax audits. The city has a stated policy of treating sales taxes as "available" if received by March 30 of the year after the applicable sales tax year.

Based on the foregoing information only, how much should the city recognize as sales tax revenues in its financial statements for the year ended December 31, 2022?

a. $1,210,000

b. $880,000

c. $1,259,500

d. $1,292,500