As a retailer Zertan Corporation sells software programs manufactured and
As a retailer, Zertan Corporation sells software programs manufactured and packaged by other parties. Zertan also purchases computer parts, assembles them as specified by a customer in a purchase order, and sells them as operating stand-alone computers. All of Zertan’s operations take place in State F, which levies a 9% sales tax. Results for the current year are as follows.
Sales of software ...................... $2,500,000
Purchases of computer parts ................. 1,600,000
Sales of computer systems ................. 8,500,000
Purchases of office supplies ................. 60,000
Purchases of packaging materials for the computer systems ..... 20,000
Purchases of tools used by computer assemblers ........ 50,000
a. What is Zertan’s own sales tax expense for the year?
b. How much F sales tax must Zertan collect and pay to the state on behalf of other taxpayers subject to the tax?
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