Question Details

The amount of sales taxes payable 



Use the following information for questions 1 and 2.
Posner Co. is a retail store operating in a state with a 7% retail sales tax. The retailer may keep 2% of the sales tax collected. Posner Co. records the sales tax in the Sales Revenue account. The amount recorded in the Sales Revenue account during May was $251,450.

	1.	The amount of sales taxes (to the nearest dollar) for May is
a.	$20,762.
b.	$16,450.
c.	$22,631.
d.	$17,602.

	2.	The amount of sales taxes payable (to the nearest dollar) to the state for the month of May is
a.	$12,573.
b.	$16,121.
c.	$20,762.
d.	$17,250.

	3.	Valley, Inc., is a retail store operating in a state with a 5% retail sales tax.  The state law provides that the retail sales tax collected during the month must be remitted to the state during the following month.  If the amount collected is remitted to the state on or before the twentieth of the following month, the retailer may keep 3% of the sales tax collected.  On April 10, 2014, Valley remitted $135,800 tax to the state tax division for March 2014 retail sales. What was Valley's March 2012 retail sales subject to sales tax?
a.	$2,716,000.
b.	$2,660,000.
c.	$2,800,000.
d.	$2,741,667.

	4.	Jump Corporation has $2,500,000 of short-term debt it expects to retire with proceeds from the sale of 85,000 shares of common stock.  If the stock is sold for $20 per share subsequent to the balance sheet date, but before the balance sheet is issued, what amount of short-term debt could be excluded from current liabilities?
a.	$1,700,000
b.	$2,500,000
c.	$800,000
d.	$0

 
	5.	Elmer Corporation has $1,800,000 of short-term debt it expects to retire with proceeds from the sale of 50,000 shares of common stock.  If the stock is sold for $20 per share subsequent to the balance sheet date, but before the balance sheet is issued, what amount of short-term debt could be excluded from current liabilities?
a.	$1,000,000
b.	$1,800,000
c.	$800,000
d.	$0




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