A restaurant business provides the following information to you as the CPA: Total Bank Deposits ...
A restaurant business provides the following information to you as the CPA:
- Total Bank Deposits for year 2018 = $612,778
- Total Cash Sales from the Cash Register (Point-of-Sale system) = $137,139
- Total Credit Card Sales from the Cash Register (Point-of-Sale system) = $662,861
- Total Sales taxes charged to customers = $72,778 (MN sales tax rate 10%)
- Cash tips received from customers = $50,083
- Credit Card tips received = $59,000
QUESTIONS:
- What would be the Total Gross Receipts to be reported to MN Department of Revenue?
- If the business does not provide the taxable sales, how would you determine this amount?
- What do you think is the difference between the bank deposits and the Sales from the Cash Register? Explain the possible causes.
Homework Answers
a) Total Gross Receipts to be reported to MN Department of Revenue:-
Cash Sales - $137,139
Credit Card Sales - $662,861
Total Sales - $ 8,00,000(To be Reported)
b) If business is unable to provide the taxable sales, in such case all receipts to the bank account has to be considered and all sales invoices to be captured to find aggregate turnover of the restaurant. Provisions applicable to restaurant has to be considered for determining the applicability of tax on such gross receipts.
c) Difference between the Cash sales and Bank deposits can be taken as concealment of turnover for paying taxes to MN Department of Revenue and these case need to be reported and all neccesary steps to be taken to comply with the provisions
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A restaurant business provides the following information to you as the CPA: Total Bank Deposits ...
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