2. Monthly Summary of Cash Receipts
This shows the income activity for the month. Henry carries the total monthly net sales shown in this summary for January ($, 865.05) to his Annual Summary. To figure total monthly net sales, Henry reduces the total monthly receipts by the sales tax imposed on his customers and turned over to the state. He cannot take a deduction for sales tax turned over to the state because he only collected the tax. He does not include the tax in this income. However, some states give the business a percentage of the sales tax collected. The amount the state pays you to collect the sales tax for them is considered income.
