Question

A state collects $180 million in withheld and estimated tax payments during the 2022 calendar year and an additional $10 million in withheld and estimated tax payments in January 2023 applicable to its 2022 calendar year. The state also expects to receive $4 million in tax payments and refund claims of $3 million for 2022 income tax returns filed by April 15, 2023. The state considers payments received with income tax returns filed by April 15 to be available and refund claims received by that date are considered liabilities for 2022. How much revenue should the state report for its year ending December 31, 2022?

a. $180 million
b. $190 million
c. $191 million
d. $194 million

Answer 1

The state should report a revenue of $191 million for its year ending December 31, 2022. This includes withheld and estimated tax payments, tax payments from income tax returns, and refund claims. The correct option is C.

Step-by-step explanation:

The state should report a revenue of $191 million for its year ending December 31, 2022.

To calculate the revenue, we need to consider the different sources of tax payments. The state collected $180 million in withheld and estimated tax payments during the 2022 calendar year and an additional $10 million in January 2023 for the 2022 calendar year. These two amounts sum up to $190 million.

The state also expects to receive $4 million in tax payments from income tax returns filed by April 15, 2023, and refund claims of $3 million for the 2022 income tax returns filed by the same date. Since the tax payments from income tax returns are considered available revenue, we include the $4 million in the total.

However, the refund claims of $3 million are considered liabilities, so we subtract this amount from the total revenue. Therefore, the final revenue to be reported by the state is $190 million + $4 million - $3 million = $191 million.