Ivy Co. operates a retail store. All items are sold subject to a 6% state sales tax, which Ivy collects and records as sales revenue. Ivy files quarterly sales tax returns when due, by the twentieth day following the end of the sales quarter. However, in accordance with state requirements, Ivy remits sales tax collected by the twentieth day of the month following any month such collections exceed $500. Ivy takes these payments as credits on the quarterly sales tax return. The sales taxes paid by Ivy are charged against sales revenue.

Following is a monthly summary appearing in Ivy's first quarter year 2 sales revenue account:

	Debit	Credit
January	$ --	10,600
February	600	7,420
March	--	8,480
	$ 600	$ 26,500

In its March 31, year 2 balance sheet, what amount should Ivy report as sales taxes payable?

	$ 600
	$ 900
	$1,500
	$1,590

This Answer is Correct (Answer is B, $900)

To determine the correct amount for sales revenue, Ivy must divide the total of sales and sales taxes by 100% plus the sales tax percentage (6%) as indicated below.

Month	Total	Percentage	Sales revenue
Jan.	$10,600	106%	=$10,000
Feb.	$ 7,420	106%	=7,000
March	$ 8,480	106%	=8,000
Total			$25,000

Sales taxes payable would include all sales taxes collected, less any sales taxes already remitted.

January sales taxes ($10,600 $10,000)	$ 600
*February sales taxes ($7,420 $7,000)	420
March sales taxes ($8,480 $8,000)	480
Total	$1,500
Less taxes remitted	600
Sales taxes payable	$ 900
*Note February sales taxes were not remitted since they did not exceed $500.

Can please show me a simpler and easier way to compute the sales taxes payable for Ivy Co. March 31, year 2 balance sheet besides the above explanation because it's diffuclty to follow and understand? Also explain step by step in computing the sales taxes payable so I can understand.