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 $189,000, what is the amount of the sales taxes owed to the taxing agency?

Question

Quizplus · Accepted Answer

The sales account balance includes both the sales price and the sales tax. To find the sales tax, divide the total balance by 1.05 (to remove the 5% tax) to find the sales amount, then subtract this from the total balance. $189,000 / 1.05 = $180,000 (sales amount), so $189,000 - $180,000 = $9,000 (sales tax).

A Retail Store Credited the Sales Account for the Sales