Question

A shopkeeper sells an article at the listed price of Rs 1500 & the rate of VAT is 12% at each stage of the sale.

If the shopkeeper pays a VAT of Rs 36 to the government, what was the price inclusive of tax at which the shopkeeper purchased the article from the wholesaler?

• A. Rs.1300
• B. Rs.1344
• C. Rs.2688
• D. Rs.1400

Answer 1

The correct option is B

Rs.1344

$\text{S.P of shopkeeper = Rs}1500,\text{VAT rate}=12\%$

and $\text{VAT = Rs}36$

So, VAT paid by shopkeeper = $\frac{x\times \left(\text{SP -CP}\right)}{100}$

$36=\frac{12}{100}\times (1500-CP)$

$CP=1200$

$\text{Cost to shopkeeper =}1200+\frac{12}{100}\times 1200=Rs1344$