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15 January, 09:07

Andre Company does not segregate sales and sales taxes when it charges customers at the register. Its register total for a given day is $5,724, which includes a 6% sales taxes. How much should be recognized as sales revenue and sales taxes payable, respectively?

a. $5,000 and $724

b. $5,437.80 and $286.20

c. $5,381 and $343

d. $5,400 and $324

e. $5,724 and $0

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  1. 15 January, 09:13
    0
    Answer:C - $5,381 and $343

    Explanation:

    Andre Company had sales of $5,724 which has a 6% sales tax included in the sales.

    Therefore we need to calculate what the sales tax component in the sales figure is. It is calculated thus:

    Total sales including tax = $5, 724

    Sales tax charged is 6%

    Therefore actual sales = $5,724 * 6%

    Equals $343

    Adjusted sales is $5,724-$343 = $5,381.

    Adjusted Sales figure is $5,381

    Tax on sales is $343
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