A shopkeeper buys a camera at a discount of 20% from the wholesaler, the printed price of the camera being Rs 1,600 and the rate of sales tax is 6%. The shopkeeper sells it to the buyer at the printed price and charges tax at the same rate. Find :
(i) The price at which the camera can be bought
(ii) The VAT (Value Added Tax) paid by the shopkeeper.
[4 MARKS]

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Solution

Each subpart: 2 Marks

(i) Price at which the camera can be bought
= 80% of Rs 1,600 + 6% of 80% of Rs 1,600
= Rs 1,280 + Rs 76.80 = Rs 1,356.80
(ii) For wholesaler, VAT = 6% of 1,280 = Rs 76.80
For buyer, VAT = 6% of $1, 600 = \frac{6}{100} \times 1, 600 = R s 96$
VAT paid by the shopkeeper = Rs 96 - Rs 76.80 = Rs 19.20

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[3 MARKS]

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Each subpart: 2 Marks (i) Price at which the camera can be bought = 80% of Rs 1,600 + 6% of 80% of Rs 1,600 = Rs 1,280 + Rs 76.80 = Rs 1,356.80 (ii) For wholesaler, VAT = 6% of 1,280 = Rs 76.80 For buyer, VAT = 6% of 1,600=6100×1,600=Rs 96 VAT paid by the shopkeeper = Rs 96 - Rs 76.80 = Rs 19.20