Question

Trader A buys a washing machine from the manufacturer for Rs 12,500. He sells it to trader B at a profit of Rs 1,500. Trader B sells it to the customer at a profit of Rs 1,000. If the rate of tax is 8%, find the amount of tax received by the government and the total amount paid by the customer for the machine.

Answer 1

S.P for the manufacturer= Rs 12,500 

S.P. for Trader A = Rs ( 12,500 + 1,500) = Rs 14,000 

S.P. for trader B =Rs ( 14,000 + 1,000) =Rs 15,000 

VAT charged by trader B = 8 % of S.P.

`= 8/100 xx  "Rs"  15000`

= Rs 1200 

C.P. for the customer = S.P. +VAT 

=Rs ( 15,000 + 1,200) 

=Rs 16,200 

Tax received by the government (VAT) =Rs 1,200 

Price paid by customer= Rs 16,200