Question

Posner Co. is a retail store operating in a state with a 7% retail sales tax. The retailer may keep 2% of the sales tax collected. Posner Co. records the sales tax in the Sales Revenue account. The amount recorded in the Sales Revenue account during May was $754,350.

The amount of sales taxes payable (to the nearest dollar) to the state for the month of May is
a. $37,719.
b. $48,363.
c. $62,286.
d. $51,750.

Answer 1

The amount of sales taxes payable to the state for the month of May is approximately $51,745.47.

Step-by-step explanation:

To find the amount of sales taxes payable to the state for the month of May, we need to determine the total sales revenue and then calculate 7% of that amount. Since the retailer keeps 2% of the sales tax collected, we also need to subtract that amount.

Step 1: Calculate the total sales revenue

Total sales revenue = $754,350

Step 2: Calculate the sales taxes payable

Sales taxes payable = 7% of total sales revenue = 0.07 * $754,350

= $52,801.50

Step 3: Calculate the amount the retailer keeps

Amount retailer keeps = 2% of total sales tax collected = 0.02 * $52,801.50

= $1,056.03

Step 4: Calculate the final amount of sales taxes payable to the state

Final amount of sales taxes payable = Sales taxes payable - Amount retailer keeps

= $52,801.50 - $1,056.03

= $51,745.47

The amount of sales taxes payable to the state for the month of May is approximately $51,745.47.