Excise Taxes

Reagan Gas provides gas utilities to a wide area of eastern Illinois. During the month of May, it billed 19,000 of its residential customers located in the town of Moline a total of $2,320,000 for electricity (this is considered revenue). In addition, Reagan is required to collect the following taxes:

1. State Excise Tax: A tax of $3.00 per customer plus 2% of billing used to fund the Kentucky Energy Commission
2. Federal Excise Tax: A tax of $0.50 per customer plus 0.1% of billing used to fund the Federal Energy Commission

Required:

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When required, round your answers to two decimal places.

1. Determine how much Reagan will bill these customers in total for the month of May. $fill in the blank 15bf33f5df8c07d_1

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2. Prepare the entry to record the billing of these amounts. If an amount box does not require an entry, leave it blank.

blank	Accounts ReceivableCashExcise Taxes Payable (Federal)Sales RevenueUtilities Expense
	Accounts PayableCashIncome Taxes PayableSales RevenueUnearned Sales Revenue
	Accounts PayableAccounts ReceivableExcise Taxes Payable (State)Income Taxes ExpenseInterest Payable
	Accounts PayableCashExcise Taxes Payable (Federal)Income Taxes PayableUtilities Expense
	(Record sale)

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3. Prepare the entry to record the collection of these amounts. If an amount box does not require an entry, leave it blank.

blank	Accounts PayableAccounts ReceivableCashSales RevenueUnearned Sales Revenue
	Accounts PayableAccounts ReceivableCashSales RevenueUnearned Sales Revenue
	(Record collection of receivables)

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4. Prepare the entry to record the payment of the state excise taxes to the appropriate governmental unit. If an amount box does not require an entry, leave it blank.

blank	Accounts PayableAccounts ReceivableCashExcise Taxes Payable (State)Income Taxes Payable
	Accounts PayableAccounts ReceivableCashExcise Taxes Payable (State)Income Taxes Payable
	(Record payment)