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 $294,000, 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 sales revenue by 1.05 (since 5% is the tax rate) to find the sales amount, then subtract this from the total sales revenue. $294,000 / 1.05 = $280,000 (sales amount), so $294,000 - $280,000 = $14,000 (sales tax).

A Retail Store Credited the Sales Revenue Account for the Sales