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Hudson Hotel collects 15% in city sales taxes on room rentals, in addition to a $2 per room, per night occupancy tax. Sales taxes for each month are due at the end of the following month, and occupancy taxes are due 15 days after the end of each calendar quarter. On January 3, 20X2, Hudson paid its November 20X1 sales tax and its fourth quarter 20X1 occupancy taxes. Additional information pertaining to Hudson's operations is:
Room Room
Rentals Nights
October 20X1 $100,000 1,100
November 20X1 110,000 1,200
December 20X1 150,000 1,800
What amounts should Hudson report as sales taxes payable and occupancy taxes payable in its December 31, 20X1, balance sheet?
A.
Sales taxes: $39,000; Occupancy taxes: $6,000
Correct B.
Sales taxes: $39,000; Occupancy taxes: $8,200
C.
Sales taxes: $54,000; Occupancy taxes: $6,000
D.
Sales taxes: $54,000; Occupancy taxes: $8,200
Since Hudson paid the November sales tax on January 3, sales tax for both November and December are payable on December 31:
Sales taxes payable on December 31, 20X1:
November sales $110,000 x .15 = $16,500
December sales $150,000 x .15 = 22,500
——-
Total $39,000
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Occupancy taxes payable on December 31, 20X1:
Taxes = Room nights for 4th quarter x $2
= (1,100 + 1,200 + 1,800) x $2
= 4,100 x $2
= $8,200
.