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 $630,000, 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. If $630,000 is the total, then $630,000 = Sales + 0.05(Sales). Solving for Sales gives $600,000, and the sales tax is 5% of $600,000, which is $30,000.

A Retail Store Credited the Sales Revenue Account for the Sales