Chapter 11, Problem 4DQ

To determine

Concept Introduction:

Sales and sales tax –

When the seller is required to pay sales tax to authorities, he has to collect sales tax from the customers. The sales is made with a total amount of the sales plus sales tax and the same amount is charged from the customer. Suppose, the seller is required to pay 4% sales tax, thus it means, total sales amount will include = sales i.e. 100 % + 4 % sales tax. He will issue an invoice of 104 % to the customer for the sales made.

$Totalsales=NetSales+SalesTax$

As per the example taken,

$\text{104\% }=\text{ 100\% }+\text{ 4\%}$

To determine:

Selling price of the item