Question

In: Accounting

Tommy bought a new computer from a company in California for $1,489, which included the cost...

Tommy bought a new computer from a company in California for $1,489, which included the cost of the computer plus shipping ($50) and handling ($20), but no sales tax was collected. Tommy received the package at his home outside of Liberal, Kansas, which is located in Seward County. Kansas has a sales tax rate of 6.500%, to which Seward County residents add 1.250%. What is the amount of compensating use tax that should be reported on Tommy's Kansas tax return?

$121

$115

$110

$97

Solutions

Expert Solution

Total sales tax rate = 6.5% + 1.25% = 7.75%

Total compensating use tax = 7.75%*$1489 = $115.

Hence second option is correct.

ekkarill92 answered 2 years ago
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