Question

Crawford Company has total proceeds (before segregation of sales taxes) from sales of $7,155. If the sales tax is 6%, the amount to be credited to the account Sales Revenue is:

A) $7,155.
B) $6,726.
C) $7,584.
D) $6,750.

Answer 1

The amount to be credited to the Sales Revenue for Crawford Company, with total proceeds (before tax) of $7,155 and a 6% sales tax, is $6,726 after calculating and deducting the sales tax from the total proceeds.

Step-by-step explanation:

The question involves calculating the amount to be credited to the account Sales Revenue for Crawford Company, given that the total proceeds before segregation of sales taxes are $7,155 and the sales tax rate is 6%. To calculate the Sales Revenue, you must first separate the sales tax from the total proceeds. The sales tax can be calculated by multiplying the total proceeds by the sales tax rate, which is expressed as a decimal. Therefore, the calculation is $7,155 × 0.06 which equals $429.30.

To find the Sales Revenue, subtract the sales tax from the total proceeds: $7,155 - $429.30 = $6,725.70. Since options are given in whole dollars and none precisely matches this figure, it must be rounded to the nearest dollar. Thus, the answer, rounded, is $6,726.