Table of Contents
- 1 How is calculating sales tax similar to calculating a discount?
- 2 How do you find the percent of a discount?
- 3 How do you find the original amount of a percentage?
- 4 How do you calculate original price after discount?
- 5 Why is sales tax recorded net of income?
- 6 Do you show sales tax as part of income?
How is calculating sales tax similar to calculating a discount?
A discount is the amount a price is reduced. To calculate a tax, you can convert the percentage to a decimal, then multiply it by the price. If you want to know the total cost, including the tax, you can multiply the original price by one plus the decimal.
How do you solve sales tax and discount problems?
Procedure:
- The rate is usually given as a percent.
- To find the discount, multiply the rate by the original price.
- To find the sale price, subtract the discount from original price.
How do you find the percent of a discount?
To calculate the percentage discount between two prices, follow these steps:
- Subtract the post-discount price from the pre-discount price.
- Divide this new number by the pre-discount price.
- Multiply the resultant number by 100.
- Be proud of your mathematical abilities.
How do you find the percentage of sales tax?
To calculate the sales tax that is included in receipts from items subject to sales tax, divide the receipts by 1 + the sales tax rate. For example, if the sales tax rate is 6%, divide the total amount of receipts by 1.06. $255 divided by 1.06 (6% sales tax) = 240.57 (rounded up 14.43 = tax amount to report.
How do you find the original amount of a percentage?
For example, if you have to work out the original price of a laptop that is being sold at 25% off:
- work out the current price as a percentage of the original price (100%): current price is 100% – 25%
- Find 1% by dividing the current price by 75.
- Multiply this 1% by 100 to find the original price (100%)
How do you calculate the percentage of a value?
To determine totals from a percent in the future, multiply the given percentage value by 100 and divide that product by the percent. This method works in any instance where a percentage and its value are given. For example, when 2 percent = 80, multiply 80 by 100 and divide by 2 to reach 4000.
How do you calculate original price after discount?
To calculate the original price of an object when you only have its post-sale price and the percentage discount, follow these steps: Divide the discount by 100. Subtract this number from 1. Divide the post-sale price by this new number.
How does a company pay sales tax on purchases?
What the company finally pays or receives is the difference between sales tax it collected from customers (output tax) and sales tax it paid on purchases (input tax). If the output tax exceeds the input tax, the company will pay the difference to tax authorities.
Why is sales tax recorded net of income?
Sales is recorded net of sales tax because any sales tax received on the sales will be returned to tax authorities and hence, does not form part of income. Sales tax account is credited since this is the amount of tax payable that will be paid to tax authorities.
Who is the ultimate payer of sales tax?
Such customers cannot recover the sales tax they pay on their purchase and are therefore the ultimate payers of sales tax. Companies are also final consumers in respect of certain goods and services they consume and must therefore bear sales tax on such purchases.
Do you show sales tax as part of income?
Since an entity is only collecting sales tax on behalf of tax authorities, output tax must not be shown as part of income. Therefore, sales revenue is shown net of any sales tax received from customers. The accounting entry to record the sale involving sales tax will therefore be as follows: