A retail store credited the Sales 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 account amounted to $315,000, what is the amount of the sales taxes owed to the taxing agency?

Question

Quizplus · Accepted Answer

The sales account includes both the sales price and the sales tax. To find the sales tax, divide the total by 1.05 to find the sales amount, then subtract from the total: $315,000 / 1.05 = $300,000 (sales amount). The sales tax is $315,000 - $300,000 = $15,000.

A Retail Store Credited the Sales Account for the Sales