Donna is a retail store that operates in a locale where the state sales tax is 5%
Question:
Donna is a retail store that operates in a locale where the state sales tax is 5% and the county sales tax is 3%. Both the state and the county require Donna to remit sales tax collections in the month following the sale. The state allows Donna to keep 2% of the sales tax it collects and the county allows Donna to keep 1% of the sales tax it collects. Donna records the sales tax that it collects in its sales revenue account. The amount recorded in Donna’s sales revenue account during March was $504,360. Donna prepares monthly financial statements.
• For the month of March, what was Donna’s sales revenues amount?
• As of March 31, what is the amount of Donna’s sales taxes payable to the state (if necessary, round to the nearest dollar)?
• As of March 31, what is the amount of Donna’s sales taxes payable to the county (if necessary, round to the nearest dollar)?
College Accounting A Contemporary Approach
ISBN: 978-0077639730
3rd edition
Authors: David Haddock, John Price, Michael Farina