Question

1) Suppose you buy lunch for $15.60 that includes a 8% sales tax. How much did the restaurant charge you for the lunch (excluding any tax) and how much does the restaurant owe for sales tax? (Do not round intermediate calculations. Round the answers to 2 decimal places.)

2)Union Apparel has sales including sales taxes for the month of $551,200. If the sales tax rate is 6%, what are Union Apparel's sales for the month? (Do not round intermediate calculations.)

3)United Supply has a $35 million liability at December 31, 2021, of which $7 million is payable in each of the next five years. United Supply reports the liability in the balance sheet as a:

Answer 1

Answer to question 1.

invoice amount charged by restaurant = 15.60

Rate of sales tax include = 8%

suppose the restaurant charged = x for the lunch excluding tax

x + x*8% = 15.60 {Billing amt. = restaurant charge + salestax}

1.08x = 15.60

x = 14.44

Answer to question 2.

sales including sales tax for the month = 551200

sales tax rate = 6%

sales for the month = ?

suppose sales for the month = x

x + x*6% = 551200

1.06x = 551200 {Billing amt. = restaurant charge + salestax}

x = 520000

Answer to question 3.

7 million in current liability section as it is payable within a year & remaining 28 million in Non current liability section as it is payable more than a year.

Please check with your answer and let me know.