Question

a company does not segregate sales and sales taxes when it charges customers at the register. its register total for a given day is $4,515, which includes a 5% sales tax. how much should be recognized as sales revenue and sales taxes payable, respectively?

Answer 1

To find the sales revenue and sales taxes payable, first calculate the total sales before tax by dividing the register total by 1.05. Sales revenue is $4,300 and sales taxes payable is $215.

Step-by-step explanation:

To calculate the amount that should be recognized as sales revenue and the amount as sales taxes payable, we must first calculate the total sales before tax. Since the total of $4,515 includes a 5% sales tax, we can set up the following equation, where x represents the sales before tax:

x + 0.05x = $4,515

Solving for x gives us:

1.05x = $4,515

x = $4,515 / 1.05

x = $4,300

Therefore, the sales before tax equals $4,300. The amount of sales taxes can then be calculated by finding 5% of $4,300:

$4,300 x 0.05 = $215

The sales revenue to be recognized is $4,300, and the sales taxes payable is $215.