Question

Q1. The rate of tax is 10% and a trader purchases an article for $ 700, if he sells the same article for $ 1000. Calculate VAT.
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Answer 1

VAT at CP=$70

VAT at SP=$100

Step-by-step explanation:

VAT is calculated as percentage which is already given.

VAT amount(CP)= 10 × 700

100

When cancel out 700 with 100 and multiply result with 10

=$70 will be VAT at Cost Price.

VAT amount(SP)= 10 × 1000

100

When cancel out 1000 with 100 and multiply result with 10

=$100 will be VAT amount at Selling Price.