Question

A manufacturer sells a washing machine to a wholesaler for $Rs.15,000$. The wholesaler sells it to a trader at a profit of $Rs.1,200$ and the trader, in turn, sells it to a consumer at a profit of $Rs.1,800$. If the rate of VAT is $8\%$ find :
(i) the amount of VAT received by the State Government from the wholesaler.
(ii) the amount that the consumer pays for the machine.

• A. $Rs.76$ and $Rs.18,440$
  
• B. $Rs.44$ and $Rs.15,440$
• C. $Rs.96$ and $Rs.19,440$
• D. None of these
  

Answer 1

The correct option is C $Rs.96$ and $Rs.19,440$

(i) For wholesaler,

$C.P.=Rs.15,000$

$Profit=Rs.1200$

and $S.P.=Rs.15,000+Rs.1,200=Rs.16,200$

$\therefore$ Tax paid by wholesaler$=8\%ofRs.15,000=Rs.1,200$
and, tax charged by wholesaler$=8\%ofRs.16,200=Rs.1,296$

$\therefore$ VAT received from wholesaler $=Taxcharged-Taxpaid$
$=Rs.1,296-Rs.1,200$

$=Rs.96$
(ii) For the trader:
Total sale-price $=Rs.15,000+Rs.1,200+Rs.1,800$
$=Rs.18,000$
$\therefore$ Tax charged $=8\%ofRs.18,000=Rs.1,440$
$\therefore$ The amount paid by the customer $=Rs.18,000+Rs.1,440$

$=Rs.19,440$

Hence, $Op-C$ is correct.