Question

Coronado Company does not ring up sales taxes separately on the cash register. Total receipts for February amounted to $42800. If the sales tax rate is 8%, what amount must be remitted to the state for February's sales taxes?

A. It cannot be determined
B. $4280
C. $3424
D. $3170

Answer 1

To calculate the sales tax remitted for February at an 8% rate on total receipts of $42,800, we must first calculate the pre-tax sales and then determine the tax amount. The pre-tax sales are found to be approximately $39,629.63, and the sales tax is hence $3,170, which is option D.

Step-by-step explanation:

The correct option : d

The total receipts from Coronado Company include both the sales and the sales tax. Therefore, to find the sales tax amount, we need to use an algebraic equation where total receipts equals the sum of the sales and the sales tax. If x is the amount of sales before tax, then x plus 8% of x (0.08x) equals the total receipts ($42,800). The equation is x + 0.08x = $42,800. To solve for x, we combine like terms to get 1.08x = $42,800. Dividing both sides by 1.08 gives us x = $42,800 / 1.08, which calculates to x = $39,629.63 approximately.

Now, we multiply $39,629.63 by 8% (or 0.08) to get the sales tax amount: $39,629.63 x 0.08 = $3,170.37, which rounds to $3,170. Therefore, the amount that must be remitted to the state for February's sales taxes is $3,170