Excise Taxes} Essex Power provides electricity to a wide area of western Ontario. During October 2018 it
Question:
Excise Taxes}
Essex Power provides electricity to a wide area of western Ontario. During October 2018 it billed 20,000 of its residential customers located in the town of Heyworth a total of \(\$ 2,435,000\) for elec-
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tricity (this is considered revenue). In addition, Essex is required to collect the following taxes:
a. Ontario Provincial Excise Tax: A tax of \(\$ 3.00\) per customer plus \(2 \%\) of billing used to fund the Ontario Energy Commission
b. Federal Excise Tax: A tax of \(\$ 0.50\) per customer plus \(0.1 \%\) of billing used to fund the Federal Energy Commission Required:
1. Determine how much Essex will bill these customers in total for the month of October 2018 .
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 federal and provincial excise taxes to the appropriate governmental unit.
\section*{OBJECTIVE 2 Problem
Step by Step Answer:
Cornerstones Of Financial Accounting
ISBN: 9780176707125
2nd Canadian Edition
Authors: Jay Rich, Jefferson Jones, Maryanne Mowen, Don Hansen, Donald Jones, Ralph Tassone