Invoices & Sales Tax
Bill correctly, add or remove a stated tax, and handle early-payment discounts.
In your head, jot if needed · no calculator why?
Opens at level 17.
Lesson and untimed practice
Read the full lesson and try each skill without a clock. About 3 minutes to read.
skills · practice stats
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Invoice total not tried yet
worked example
An invoice has $330 of shipping, 9 hours of installation at $55 an hour, and 7 posters at $39.75 each. What is the invoice total before tax?
Answer: $1,103.25
- Lines: $330; 9 × $55 = $495; 7 × $39.75 = $278.25.
- Total: $330 + $495 + $278.25 = $1,103.25.
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Add sales tax not tried yet
worked example
Assume a sales tax rate of 7.5%. On a $410 sale, what does the customer pay in total?
Answer: $440.75
- Tax = $410 × 7.5% = $30.75; total = $410 + $30.75 = $440.75.
- Or in one step: $410 × 1.075 = $440.75.
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Back out the tax not tried yet
worked example
A receipt total of $434.50 includes an assumed 10% sales tax. What was the price before tax?
Answer: $395.00
- The total is 110% of the pre-tax price, so price = $434.50 ÷ 1.1 = $395.
- Check: $395 × 10% = $39.50 of tax; $395 + $39.50 = $434.50.
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Early-payment discount not tried yet
worked example
Terms: 3% off if paid within 10 days, otherwise the full amount is due in 30 days. You pay a $6,350 invoice on day 1. How much do you pay?
Answer: $6,159.50
- Day 1 is inside the 10-day window, so take 3% off: $6,350 − $190.50 = $6,159.50.
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Sales tax isn't your revenue not tried yet
worked example
This month you collected $5,292: $4,900 of sales plus $392 of sales tax (at an assumed 8%). How much of the $5,292 is your revenue?
Answer: $4,900.00
- Sales tax is collected on behalf of the government and owed to it, so it's a liability until paid over.
- Revenue is $5,292 − $392 = $4,900.
rest ladder
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