Oracle Financials Cloud: General Ledger 2017 Implementation Essentials — Question 70

Your customer has a state tax of 20% and a city tax of 10% as non-inclusive tax rates that are applicable on a transaction line. Your invoice has two lines: Line1 with $600 USD and Line2 with $400 USD.
What will be the resulting tax and invoice amounts for your tax invoice?

Answer options

• A. state tax of $166.67 USD for the invoice, city tax of $16.67 USD, and an invoice total of $1,184.34 USD.
• B. state tax of $166.67 USD for the invoice, city tax of $91.11 USD, and an invoice total of $1,257.78 USD.
• C. state tax of $166.67 USD for the invoice, city tax of $91.11 USD, and an invoice total of $1,000 USD.
• D. state tax of $200 USD for the invoice, city tax of $10 USD, and an invoice total of $1,210 USD.
• E. state tax of $200 USD for the invoice, city tax of $100 USD, and an invoice total of $1,300 USD.

Correct answer: E

Explanation

The correct answer is E because the state tax on the total of $1,000 (Line1 + Line2) is 20% or $200, and the city tax at 10% is $100. Other options provide incorrect calculations for either the state or city taxes or the total invoice amount.