P. 4-6 Derived taxes are derived from underlying transactions. A state imposes a sales tax of 6 percent. The state's counties are permitted to levy an additional tax of 2 percent. The state administers the tax for the counties, forwarding the proceeds to the counties 15 days after it receives the proceeds from the merchants. The state requires merchants to file a return and transmit collections either monthly, quarterly, or annually, depending on the amount of taxable sales made by the merchant. This problem pertains only to taxes that must be paid quarterly. Merchants must file their returns and transmit their taxes within one month after the end of a quarter. The quarters are based on the calendar year. Thus, taxes for the quarter ending March 31 are due by April 30; those for the quarter ending June 30 are due by July 31. The fiscal year of both the state and its counties ends on September 30. For the quarter ending September 30, 2021, merchants collected and paid (in October) $300 million in taxes. Of these, 80 percent ($240 million) are applicable to the state; 2 percent ($6 million) are applicable to Cayoga County. 1. Prepare journal entries to summarize the state's sales tax activity for its share of taxes for the quarter ending September 30, 2021: a. On a modified accrual basis b. On a full accrual basis 2. Prepare journal entries to summarize the county's sales tax activity for the quarter ending September 30, 2021: Dn a. On a modified accrual basis b. On a full accrual basis