• anonymous
A manufacturer marks an article for Rs. 5000. He sells it to a wholesaler at a discount of 25% on the marked price and the wholesaler sells it to the retailer at a discount of 15%. The retailer sells it a consumer at the marked price and at each stage the VAT is 8%. Calculate the amount of VAT received by the government from: i) the wholesaler ii)the retailer
  • Stacey Warren - Expert
Hey! We 've verified this expert answer for you, click below to unlock the details :)
At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.
  • chestercat
I got my questions answered at in under 10 minutes. Go to now for free help!
  • hoblos
i) the wholesaler get a 25% discount so he pays to the manufacturer 75% of the Rs 5000 75% of 5000 is 3750 the VAT is 8% 8% of 3750 is Rs 300 ii) the retailer get a 15% discount so he pays to the manufacturer 85% of 5000 85% of 5000 is 4250 the VAT is 8% 8% of 4250 is Rs 340
  • anonymous
No offence, but are you sure that's right? you either calculate VAT on the profit or as the difference between tax recovered and tax paid.
  • anonymous
or so i thought.

Looking for something else?

Not the answer you are looking for? Search for more explanations.