Problem 8-77A Excise Taxes Reagan Gas provides gas utilities to a wide area of eastern Illinois....

Problem 8-77A
Excise Taxes

Reagan Gas provides gas utilities to a wide area of eastern Illinois. During May 2019 it billed 36,000 of its residential customers located in the town of Moline a total of $3,295,000 for electricity (this is considered revenue). In addition Reagan is required to collect the following taxes:
1. State excise tax: A tax of $5.00 per customer plus 3% of billing used to fund the Illinois Energy Commission
2. Federal excise tax: A tax of $0.45 per customer plus 0.2% of billing used to fund the Federal Energy Commission
Required:

1. Determine how much Reagan will bill these customers in total for the month of May 2019.
$

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

(Record sale)

3. Prepare the entry to record the collection of these amounts.

(Record collection of receivables)

4. Prepare the entry to record the payment of the state excise taxes to the appropriate governmental unit.

(Record payment)

Check My Work

Expert Solution

Answer: 1. Billing to customers in May 2019

Particulars	Calculation	Amount $
Revenue		3,295,000
Provisional Excise Tax	$5 * 36,000	180,000
	3% * 3,295,000	98,850
Federal Excise Tax	$0.45 * 36,000	16,200
	0.2% * 3,295,000	6,590
TOTAL		3,596,640

2. Journal entry to record the billing of the amounts

Account Title and Explanation	Debit $	Credit $
Account receivable	3,596,640
Sales revenue		3,295,000
Provincial Excise taxes Payable ($180,000 + $98,850)		278,850
Federal Excise taxes Payable ($16,200 + $6,590)		22,790
(To record sale)

3. Journal entry to record the collection of these amounts

Account Title and Explanation	Debit $	Credit $
Cash	3,596,640
Account receivable		3,596,640
(To record collection of receivable)

4. Journal entry to record the payment of the state excise taxes to the appropriate governmental unit

Account Title and Explanation	Debit $	Credit $
Provincial Excise taxes Payable ($180,000 + $98,850)	278,850
Federal Excise taxes Payable ($16,200 + $6,590)	22,790
Cash		301,640
(To record the payment of the state excise taxes)

Please rate positively if this helped you :)

ekkarill92 answered 4 months ago

Problem A, Income Taxes Harms Way Company (HWC) provides you with the following information for the...

Problem A, Income Taxes Harms Way Company (HWC) provides you with the following information for the year ended October 31, 2020. Your assignment is to calculate income tax expense, income taxes payable, and deferred income tax assets/liabilities. The end result will be a journal entry to record all of that. In addition, you must calculate HWC’s effective tax rate and prepare a reconciliation to the federal statutory rate of 21%. You can explain the difference in words, if you wish....

TB Problem Qu. 8-224 Weller Industrial Gas Corporation ... Weller Industrial Gas Corporation supplies acetylene and...

TB Problem Qu. 8-224 Weller Industrial Gas Corporation ... Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: •Sales are budgeted at $390,000 for November, $410,000 for December, and $400,000 for January. •Collections are expected to be 80% in the month of sale and 20% in the month following the sale. •The cost of goods sold is 73% of sales. •The company desires an ending merchandise inventory equal to 80% of...

Problem 8-21 (Algorithmic) Round Tree Manor is a hotel that provides two types of rooms with...

Problem 8-21 (Algorithmic) Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The profit per night for each type of room and rental class is as follows: Rental Class Room Super Saver Deluxe Business Type I $36 $38 — Type II $15 $26 $38 Type I rooms do not have wireless Internet access and are not available for the Business rental class. Round Tree's management makes a forecast...

Chapter 8 Problem 8.113 - Clinical Applications 49 of 57 Constants | Periodic Table A gas...

Chapter 8 Problem 8.113 - Clinical Applications 49 of 57 Constants | Periodic Table A gas mixture with a total pressure of 2500 torr is used by a scuba diver. If the mixture contains 1.5 moles of helium and 7.0 moles of oxygen, what is the partial pressure, in torr, of each gas in the sample? Part A PHe = _____ Express your answer in torr to two significant figures. nothing torr SubmitRequest Answer Part B PO2 = _____ Express...

Problem 13C-3 Income Taxes and Net Present Value Analysis [LO13-8] Lander Company has an opportunity to...

Problem 13C-3 Income Taxes and Net Present Value Analysis [LO13-8] Lander Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Lander estimated the following costs and revenues for the project: Cost of equipment needed $ 270,000 Working capital needed $ 64,000 Repair the equipment in two years $ 20,000 Annual revenues and costs: Sales revenues $ 390,000 Variable expenses $ 200,000 Fixed out-of-pocket operating costs $ 88,000 The piece of equipment...

Problem 4-9 (Algo) Statement of cash flows [LO4-8] The Diversified Portfolio Corporation provides investment advice to...

Problem 4-9 (Algo) Statement of cash flows [LO4-8] The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue $ 1,080,000 Operating expenses 790,000 Income before income taxes 290,000 Income tax expense 72,500 Net income $ 217,500 The following balance sheet information also is available: 12/31/2021 12/31/2020 Cash $ 399,500 $ 79,000 Accounts receivable 138,000 109,000 Accrued liabilities (for operating expenses) 88,000 69,000 Income taxes payable 19,000...

Problem 4-9 Statement of cash flows [LO4-8] The Diversified Portfolio Corporation provides investment advice to customers....

Problem 4-9 Statement of cash flows [LO4-8] The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2018, appears below: Service revenue $ 1,180,000 Operating expenses 840,000 Income before income taxes 340,000 Income tax expense 68,000 Net income $ 272,000 The following balance sheet information also is available: 12/31/18 12/31/17 Cash $ 469,000 $ 84,000 Accounts receivable 148,000 114,000 Accounts payable (operating expenses) 98,000 74,000 Income taxes payable 24,000 43,000 In...

This is problem 8-13 from El-Wakil’s Powerplant Technology book – Consider a combined gas-steam turbine cycle...

This is problem 8-13 from El-Wakil’s Powerplant Technology book – Consider a combined gas-steam turbine cycle with both machines ideal. Air enters the compressor at 1 atm and 500 degree R. 200 percent theoretical air gases enter the gas turbine at 2400 degree R. The pressure ratio for both compressor and turbine is 5.624. No intercooling, reheat, or regeneration are used in the gas-turbine cycle. The turbine exhaust is used directly without supplementary firing and leaves to the stack at...

Question