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The user assumes the entire risk as to the accuracy and the use of the information supplied. This information may be copied and distributed subject to the following conditions: 1)All text must be copied without modification and all pages must be included; 2)If software is included, all files on the disk(s) must be copied without modification; 3)All software included and documentation must be distributed together; and 4)This information may not be distributed for profit.
Copyright © 1996 Platinum Software Corporation. All Rights Reserved.
Platinum ia a registered trademark of Platinum Software Corporation.
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TAX ROUNDING IN ACCOUNTS RECEIVABLE
Platinum was designed to calculate taxes as follows:(Assume the tax file is set up with the following information)
Tax File: State 7.25%
Cnty .5 %
City .5 %
Enter an invoice for a quantity of 1 at the price of $335.00. To calculate the tax, the system multiplies the Quantity times Price, and rounds that figure. Then it takes the rounded amount and multiplies it by each of the tax levels one at a time. Each of those amounts are then rounded.
The reason it is done this way is because you would need to pay each of the 3 levels separately. If the amounts are not rounded 2 places to the right of the decimal at each level, you wouldn't be paying the levels accurately.
Please find the following example, using the above tax file:
(line item) 1 X $335.00 = $335.00
(state tax) $335.00 X .0725 = 24.2875 rounds to $ 24.29
(cnty tax) $335.00 X .005 = 1.675 rounds to $ 1.68
(city tax) $335.00 X .005 = 1.675 rounds to $ 1.68
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Total Tax =$ 27.65
