A manufacturer lists the price of the goods at Rs.240
per article. The wholesaler ge6ts a discount of 25% on the goods from the manufacturer.
The retailers are allowed a discount of 15% on the list price by the wholesaler. The prescribe rate of sale tax
at all stages is 8%. A customer buys an article from the reatailer
at the listed price. Find the VAT paid by the retailer & wholesaler.
I don't know what you mean by the acronym, "VAT."
To find the VAT paid by the retailer and wholesaler, we first need to calculate the actual selling price at each stage of the transaction.
Step 1: Manufacturer's Price
The manufacturer lists the price of the goods at Rs.240 per article. There is no discount or VAT applied at this stage. So, the actual selling price by the manufacturer is the same as the list price, which is Rs.240.
Step 2: Wholesaler's Price
The wholesaler gets a discount of 25% on the goods from the manufacturer. To calculate the discounted price, we subtract the discount amount from the manufacturer's price.
Discount Amount = 25% of Rs.240 = Rs.60
Selling Price by Wholesaler = Rs.240 - Rs.60 = Rs.180
Step 3: Retailer's Price
The retailer is allowed a discount of 15% on the list price by the wholesaler. To calculate the discounted price, we subtract the discount amount from the wholesaler's price.
Discount Amount = 15% of Rs.180 = Rs.27
Selling Price by Retailer = Rs.180 - Rs.27 = Rs.153
Step 4: VAT Calculation
VAT (Value Added Tax) is calculated on the selling price at each stage. The prescribed rate of sale tax is 8%.
VAT paid by the Wholesaler:
VAT amount = 8% of Rs.180 = Rs.14.40
VAT paid by the Retailer:
VAT amount = 8% of Rs.153 = Rs.12.24
Therefore, the VAT paid by the retailer is Rs.12.24 and the VAT paid by the wholesaler is Rs.14.40.