Business, 01.03.2021 22:00, hiitslillyhere

Ivy Co. operates a retail store. All items are sold subject to a 6% state sales tax, which Ivy collects and records as sales revenue. Ivy files quarterly sales tax returns when due, by the twentieth day following the end of the sales quarter. However, in accordance with state requirements, Ivy remits sales tax collected by the twentieth day of the month following any month such collections exceed $500. Ivy takes these payments as credits on the quarterly sales tax return. The sales taxes paid by Ivy are charged against sales revenue. Following is a monthly summary appearing in Ivy's first quarter year 2 sales revenue account:
Debit Credit
January $ -- 10,600
February 600 7,420
March -- 8,480
$ 600 $ 26,500
In its March 31, year 2 balance sheet, what amount should Ivy report as sales taxes payable?
a. $ 600
b. $ 900
c. $1,500
d. $1,590

Answers: 1

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Ivy Co. operates a retail store. All items are sold subject to a 6% state sales tax, which Ivy colle...