Question

The printed price of an article is Rs. 9,600. A shopkeeper buys it at a discount of 20% ans sells it at the printed price. Find the amount of VAT paid by the shopkeeper, if the rate of sales Tax is 10%.
Also, find the profit made by the shopkeeper, if he spends Rs. 120 on the transportation of the article.

Answer 1

Printed price of an article = Rs. 9,600
Discount % = 20%
Sale price of article = 9,600 − 20% of 9,600
= 9,600 – 1,920
= 7,680
Expense on transportation = Rs. 120
Cost price for the shopkeeper = Rs. 7,680 + Rs. 120 = Rs. 7,800
Rate of sales tax =10%
Tax charged paid by the shopkeeper = 10% of 7,680
                                                           = 10/100 ×7,680
                                                           = 768

Total money paid by the shopkeeper = Rs. 7,800 + Rs. 768
= Rs. 8,568
Selling price for the shopkeeper = Rs. 9,600
Tax charged by the shopkeeper = 10% of Rs. 9,600 = Rs. 960
VAT paid by the shopkeeper = Rs. 960 − Rs. 768 = Rs. 192
Profit made by the shopkeeper = Rs. 9,600 − Rs. 7,800 = Rs. 1,800