question in janurary 2012 large merchants remitted sales taxes of 400million owing t 4279336
In Janurary 2012, large merchants remitted sales taxes of $400million owing to sales of Deember 2011. In February 2012, theyremitted $280 million of sales taxes owing to sales of January2012. In January small merchants remitted sales of $150 millionowing to sales of the fourth quarter.
1. Prepare an appropriate journal entry to indicate the impactof the transactions on the state's fund financial statement for theyear ending December 31, 2011.
2. Suppose instead, that 10 perecent of the taxe recieved by thestate were collected on behalf of a city within the state. It isthe policy of the state to remit the taxes to the city 30 daysafter it recieves them. Prepare an appropriate journal entry toindicate the impact of the transactions on the city's fundfinancial statements for the year ending December.31, 2011.