Recording sales tax journal entries

Assignment Help Accounting Basics
Reference no: EM1356660

Sales taxes should be recognized when the underlying event takes place.

A state requires ''large'' merchants (i.e., those with sales over a specified dollar amount) to report and remit their sales taxes within fifteen days of the end of each month. It requires ''small'' merchants to report and remit their taxes within fifteen days of the end of each quarter.
In January 2012, large merchants remitted sales taxes of $400 million owing to sales of December 2011. In February 2012, they remitted $280 million of sales taxes
owing to sales of January 2012. In January small merchants remitted sales taxes of $150 million owing to sales of the fourth quarter of 2011.

1. Prepare an appropriate journal entry to indicate the impact of the transactions on the state's fund financial statements for the year ending December 31, 2011.

2. Suppose, instead, that 10 percent of the taxes received by the state were collected on behalf of a city within the state. It is the policy of the state to remit the taxes to the city 30 days after it receives them. Prepare an appropriate journal entry to indicate the impact of the transactions on the city's fund financial statements for the year ending December 31, 2011.

Reference no: EM1356660

Questions Cloud

Obesity on the youth in america : What are the effects of nutrition, physical activity, and obesity on the youth in America? How can it affect emotions?
Work breakdown structure to define a project : Whether you are new to project management and working on your PMP certification, or been doing project management for many years, you're sure to find our templates helpful in your projects.
Compute the most economically rational value : Suppose IBM is expected to pay a total cash dividend of $3.60 next year and dividends are expected to increase indefinitely by 3% a year. Suppose the required rate of return is 9 percent.
Calculate the length of the cables supporting the trapeze : A 47 g golf ball is driven from the tee with an initial speed of 50.0 m/s and rises to a height of 24.8 m.
Recording sales tax journal entries : Prepare an appropriate journal entry to indicate the impact of the transactions on the state's fund financial statements for the year ending December 31, 2011.
Show principles of global compact : Explain what is the most important principle to you and why also what is the least important principle to you and why?
Adolescent physical development : Does adolescent psychological development follow the same path as adolescent physical development? Include citations from at least two scholarly sources to support your discussion.
Explain business and financial risks related to capital : Explain Business and financial risks related to capital structure and Criticism at the MM model and assumption
How computer technology has changed our society : How have the major players including the government either made these statements true or false? What are examples of why or why not.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Realized gain on transaction

Alvin owned a building located in Kansas that he rented to a local business-Alvin built a new building at a cost of $400,000. What is Alvin’s realized gain (loss) on this transaction?

  Corporate law case studies

Corporate Law Case Studies, case for  Designco Pty ltd designs, manufactures and distributes craft kits for children, case for  Andrew and Belinda are the only shareholders and directors of Sailors Pty Ltd

  Internal controls-payroll cycle

Please provide an explanation of the strengths and weaknesses of the internal controls related to the payroll cycle.

  Important risks for audit of acquisition

What are the most important risks for the audit of the acquisition and payment cycles in the automotive industry?

  Significance and usefulness of accounting cycle

Please discuss the value of the accounting cycle to the including:

  Allocate purchase price over basket of assets

What is the acquisition cost of each asset? Prepare a journal entry to record the acquisition. Danny plans to depreciate the operating assets on a straight-line basis for 20 years. Determine the amount of depreciation expense for 2008 on these newl..

  Bledsoe large cap stock fund

Using the returns for the Bledsoe Large-Cap Stock Fund and the Bledsoe Bond Fund, graph the opportunity set if feasible portfolios.

  Calculating cost of goods sold and ending inventory

Stan's Wholesale buys canned tomatoes from canneries and sells them to retail markets. During August 2009, Stan's inventory records showed the following: Calculate the cost of goods sold and ending inventory using the following cost flow alternati..

  Operation of the partnership prevail

aesar and Junius orally agreed to become partners in a food testing business. one-half of $80,000, the reasonable value of Caesar’s services during the operation of the partnership. Who will prevail and why?

  Preparation of sales budget

Assuming that the trend of sales indicated in part (1) is to continue in 2009, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 2009. Place your answer in a columnar table similar to that in ..

  Best course of action from tax perspective

Tax professional to decide on the best course of action from a tax perspective on their issues. make a three page memo (at least 300 words per page) to John and Jane Smith addressing the issues presented.

  Adjusting entry to recognize bad debts

Assuming that the company uses the percentage of receivables allowance method, prepare the adjusting entry on December 31, 2001, to recognize bad debts expense.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd