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 ¥420,000,000 what is the amount of the sales taxes owed to the taxing agency?

Question

Quizplus · Accepted Answer

The sales revenue includes both the sales price and the sales tax. To find the sales tax, divide the total amount by 1.05 to find the sales price, then subtract this from the total. ¥420,000,000 / 1.05 = ¥400,000,000 (sales price). The sales tax is ¥420,000,000 - ¥400,000,000 = ¥20,000,000.

A Retail Store Credited the Sales Revenue Account for the Sales