Final answer:
To determine the amount of sales tax Waterway Company must remit to the state for October, we calculate 6% of the total sales (excluding tax) from the total receipts of $42,400. By solving the equation, we find out that the total sales were $40,000 and the sales tax owed is $2,400.
Step-by-step explanation:
To calculate the amount of sales tax that Waterway Company must remit to the state for October's sales, we need to separate the total receipts into the actual sales and the sales tax. Since the sales tax is not rung up separately on the cash register and we know that the total receipts include the sales tax, we can use the following procedure to find the sales tax amount.
Let's denote the total receipts as Total Receipts and the sales before tax as Sales. The sales tax rate is given as 6%, which we will denote as Tax Rate. We have the equation Total Receipts = Sales + (Sales × Tax Rate).
Since the total receipts for October are $42,400 and the sales tax rate is 6%, we can represent this as:
$42,400 = Sales + (Sales × 0.06)
To find the Sales, we solve the equation:
Sales + (Sales × 0.06) = $42,400
Sales × (1 + 0.06) = $42,400
Sales × 1.06 = $42,400
Sales = $42,400 / 1.06
Sales = $40,000
Now, to find the sales tax amount, we can multiply the Sales by the Tax Rate:
Tax Amount = $40,000 × 0.06
Tax Amount = $2,400
Therefore, the amount that must be remitted to the state for October's sales taxes is $2,400 (Answer b).