Question

Clinton Power provides electricity to a wide area of western Kentucky. During October 2011 it billed 20,000 of its residential customers located in the town of Heyworth a total of $2,435,000 for electricity (this is considered revenue). In addition Clinton is required to collect the following taxes:
a. State Excise Tax: A tax of $3.00 per customer plus 2 percent of billing used to fund the Kentucky Energy Commission
b. Federal Excise Tax: A tax of $0.50 per customer plus 0.1 percent of billing used to fund the
Federal Energy Commission

Required:
1. Determine how much Clinton will bill these customers in total for the month of October 2011.
2. Prepare the entry to record the billing of these amounts.
3. Prepare the entry to record the collection of these amounts.
4. Prepare the entry to record the payment of the state excise taxes to the appropriate governmental unit.


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  • CreatedSeptember 22, 2015
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