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If sales tax is at 20%, then the cost structure would be:
Net amount + sales tax = Gross amount
100 20 120
Once that is established then you can easily move between any of the sales figures
using proportions1)Net amount = 280: therefore
Net amount + sales tax = Gross amount
100 20 120
280 ? ?
sales tax = 280 x 20/100 = 56, and
gross amount = 280 x 120/100 = 3362) Tax = 40: therefore
Net amount + sales tax = Gross amount
100 20 120
? 40 ?
net amount = 40 x100/20 = 200, and
gross amount = 40x 120/20 = 240
3) Gross amount = 840: therefore
Net amount + sales tax = Gross amount
100 20 120
? 40 ?
sales tax = 840 x 20/120 = 140, and
net amount = 840 x 100/120 = 700Please explain example 2 and 3 with some detail because i am unable to understand them ?
That looks a really complicated way to learn it. This is how I learned it:
Net amount + Sales Tax = Gross Amount
5/6 1/6 6/6That’s how I figure out sales tax. If I have the gross amount I divide by six to get the sales tax. Then if I then multiply that number by five it gives me the net amount. Hope that helps
@scarletpig said:
That looks a really complicated way to learn it. This is how I learned it:Net amount + Sales Tax = Gross Amount
5/6 1/6 6/6That’s how I figure out sales tax. If I have the gross amount I divide by six to get the sales tax. Then if I then multiply that number by five it gives me the net amount. Hope that helps
Hello kristy ) thanks for the reply but apparently you have not understood the question.
Can you please tell me why you divided it by six to get the sales tax ?Hi
Because Sales tax is one fifth of the net amount and therefore one sixth of the gross amount.
For example:
If net is 5 then sales tax would be 1. Add them together to get the gross of 6. So if gross is six then divide by six to get sales tax of 1.So in your example 2 above you are given sales tax of 40. To get net amount from this you multiply by 5 (answer 200). To get gross amount multiply by 6 (answer 240)
Hope this helps
Thanks but my opinion the simplest way Is to use proportions such as
if
20 of sales tax is in120 then how much will be in 840?that’s
20 ———- 120
X————-840then by doing cross multiplication u will get the answer.
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