SALES TAX Clinton Power provides electricity to a wide area of western Kentucky. During October 2011 it
Question:
SALES TAX Clinton Power provides electricity to a wide area of western Kentucky. During October 2011 it billed 1,000 of its residential customers located in the town of Heyworth a total of $131,000 for electricity. In addition Clinton Power is required to collect the following taxes:
a. Meter Charge: A flat rate of $4.50 per customer remitted to the local municipality
(Heyworth) to maintain and read the customer’s meter
b. Public Benefit Charge: A State of Kentucky mandated charge of $1.25 per customer for investing in energy efficiency, renewable energy, and low-income assistance programs
c. State Tax: A tax of 1 percent used to fund the Kentucky Energy Commission
d. Federal Excise Tax: A tax of 0.05 percent used to fund the Federal Energy Commission Required:
. Determine how much Clinton Power will bill these 1,000 customers in total for the month of October 2011.
. Provide the entry to record the billing of these amounts.
. Provide the entry to record the collection of these amounts.
. Provide the entry to record the payment of the sales taxes to the appropriate governmental unit.
Step by Step Answer:
Cornerstones Of Financial Accounting Current Trends Update
ISBN: 9781111527952
1st Edition
Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen