Question

1. A manufacturing company sells a T.V. to a trader A for 18000. Trader A sells it to a
trader B at a profit of $750 and trader B sells it to a consumer at a profit of 900. If
the rate of sales tax (under VAT) is 10%, find
(i) the amount of tax received by the Government.
(ii) the amount paid by the consumer for the T.V.
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Answer 1

Dear Student,

◆ Answer -

(i) Tax received by govt = $ 1965

(ii) Amt paid by consumer = $ 21615

◆ Explanation -

Selling price of the TV will be -

Selling price = Cost price + profit by A + profit by B

Selling price = 18000 + 750 + 900

Selling price = 19650 $

Amount of tax recieved by govt,

Tax = selling price × tax rate

Tax = 19650 × 10/100

Tax = 1965 $

Total amount paid by the consumer for TV is -

Total = Selling price + tax

Total = 19650 + 1965

Total = 21615 $

Hope this helps you..