A retail store credited the Sales Revenue account for the sales price and the amount of sales tax on sales. If the sales tax rate is 5% and the balance in the Sales Revenue account amounted to $252,000, what is the amount of the sales taxes owed to the taxing agency?
A) $240,000
B) $252,000
C) $12,600
D) $12,000

Question

Quizplus · Accepted Answer

The sales revenue includes both the sales price and the sales tax. If $252,000 is the total, then $252,000 = Sales + 0.05(Sales). Solving for Sales gives $240,000, and the sales tax is 5% of $240,000, which is $12,000.

A Retail Store Credited the Sales Revenue Account for the Sales