A wholesaler buys a TV from the manufacturer for Rs. $25, 000$ . He marks the price of the TV $20 %$ above his cost price and sell it to a retailer at $10$ % discount on the marked price. If the rate of VAT is $8 %$ , find the:
(i) marked price.
(ii) retailer's cost price inclusive of tax.
(iii) VAT paid by the wholesaler.

Open in App

Solution

(i) Cost price for wholesaler $= R s . 25, 000$
Marked price $= R s . 25, 000 + \frac{20}{100} \times R s . 25, 000$
$= R s . 30, 000$
(ii) Discount $= 10$ % of $30, 000 = R s . 3, 000$
Cost price for retailer $=$ Marked price $-$ Discount
$= R s . 30, 000 - R s . 3, 000$
$= R s . 27, 000$
Cost price inclusive tax $= R s . 27, 000 + \frac{8}{100} \times R s . 27, 000$
$= R s . 29, 160$
(iii) Cost price for wholesaler $= R s . 25, 000$
Sale price for wholesaler $= R s . 27, 000$
Profit for wholesaler $= R s . 27, 000 - R s . 25, 000 = R s . 2, 000$
VAT $= \frac{8}{100} \times R s . 2, 000$
$= R s . 160$ .

Suggest Corrections

Similar questions

A manufacturer marks an article for Rs.5,000. He sells it to a wholesaler at a discount of 25% on the marked price & the wholesaler sells it to a retailer at a discount of 15 % on the market price. The retailer sells it to a consumer at the marked price & the vat at each stage is 8 %. Calculate vat received by the government from the whole seller & retailer.

A manufacturer marks an article at Rs. 5000. He sells the article to a wholesaler at a discount of 25% on the marked price and the wholesaler sells it to a retailer at a discount of 15% on its marked price. If the retailer sells the article without any discount and at each stage, the sales tax is 8%, then the amount of VAT paid by wholesaler and retailer are :

Q. The dealer buys an article at a discount of