A general contractor is required to collect sales tax on materials sold to a subcontractor. The materials cost $15,000 and the sales tax rate is 7.25%. What is the total amount the contractor must collect?
Correct Answer
A) $16,087.50
Sales tax = $15,000 × 7.25% = $1,087.50. Total amount to collect = $15,000 + $1,087.50 = $16,087.50.
Why This Is the Correct Answer
Sales tax = $15,000 × 7.25% = $1,087.50. Total amount to collect = $15,000 + $1,087.50 = $16,087.50.
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