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

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