Question

Stine Co. is a retail store operating in a state with a 6% retail sales tax. The retailer may keep 2% of the sales tax collected. Stine Co. records the sales tax in the Sales account. The amount recorded in the Sales account during May was $148,400.

Answer 1

Incomplete Question,  The omitted is

a)What is the amount of sales taxes (to the nearest dollar) for May and

b)The amount of sales taxes payable (to the nearest dollar) to the state for the month of May is

Answer: Sales tax =$8,400

sales taxes payable=$8,232

Explanation:

a)  Sales tax = (Sales Revenue x percentage of sales tax) / 100+  percentage of sales tax

= ($148,400 x 6%) / 100+6 =$148,400 x 6%)/106%= 8904/1.06 = $8,400

 Sales tax =$8,400

The retailer is allowed to keep 2%, Therefore

b)sales taxes payable= Sales tax  x (100-2%)= $8400 x 98%= $8,232

Answer 2

Answer:

Sales tax =$8,400

sales taxes payable=$8,232