- This topic has 2 replies, 3 voices, and was last updated 14 years ago by
.
- Posts
Erin is registered for sales tax.During May, she sells goods with tax exclusive price of $600 to Kyle on Credit. As Kyle is buying a large quantity of goods,Erin reduces the price by 5%. She also offers a discount of another 3% if Kyle pays within 10 days. Kyle does not pay within 10 days.
If sales tax is charged at 17.5%, what amount should Erin charge on this transaction ?
A: $96.60
B: $101.85
C :$99.75
🙁 $105.00sales tax is the amount after all discounts
after trade discount =600-600*5%=570
after cash discount = 570-570*3%=552.9
so the sales tax = 552.9*17.5% = 96.75
Above is my answer. Please check your options. I guess the option C should be 96.75 instead of 99.75.The right answer is C ($99.75).
Sales excluding sales tax= $600
Trade discount 🙁 $60)
Sales net of trade discount=$570
Sales tax element (570 *175%) = $99.75For further explanation and other questions, contact: +2348033851555 or email to ayorinde_tt@yahoo.com
All the best in your exams.
- You must be logged in to reply to this topic.