Goodwin Auto Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $13,944. All sales are subject to a 5% sales tax. Compute sales taxes payable, and make the entry to record sales taxes payable and sales. (Round your answers to 0 decimal places. For multiple debit/credit entries, list accounts in order of magnitude.)
March 16 DEBIT CASH $13,944
......................CREDIT SALES $13,247(incorrect!
CREDIT SALES TAXES PAYABLE $697 (incorrect!)
The only thing incorrect is the 2 numbers. What am I doing wrong?
2007-11-05 13:58:36 · 2 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
If the register total is $13,944 and sales tax is 5%, then $13,944 must be 105% . Therefore, sales must be 100/105 x 13,944 = $13,280. Similarly, sales tax is 5/105 x 13,944 = $664. Alternatively, you could work out sales tax by 13,944 - 13,280 = $664.
2007-11-05 20:09:04 · answer #1 · answered by Sandy 7 · 3⤊ 0⤋
The answers you are looking for are $13280 and $664. You can buy really inexpensive tax caculators which will do this in a second. Since your company includes the tax a tax caculator makes things way easier. If figures the tax and subtracts it from the gross amount informing you of your net.
2007-11-06 01:08:49 · answer #2 · answered by cindy 1 · 0⤊ 0⤋