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 turns 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 on the sale of this machine from the manufacturer and the wholesaler.

(ii) The amount that the consumer pays for the machine.

Asked by Topperlearning User | 1st Sep, 2017, 02:49: PM

Expert Answer:

begin mathsize 12px style Cost space of space washing space machine equals Rs. space 15 comma 000
left parenthesis straight i right parenthesis space Amount space of space tax space collected space by space the space manufacturer equals 8 percent sign space of space Rs. space 15 comma 000 equals 8 over 100 cross times Rs. space 15000 equals Rs. space 1 comma 200
As space profit space by space wholesaler space is space Rs. space 12 comma 000 comma space VAT space to space be space paid space by space the space wholesaler
equals 8 percent sign space of space Rs. space 1200
equals 8 over 100 cross times Rs. space 1200
equals Rs. space 96
As space trader space earns space straight a space profit space of space Rs. space 1 comma 800 comma space VAT space to space be space paid space by space the space trader
equals 8 percent sign space of space Rs. space 1 comma 800
equals 8 over 100 cross times Rs. space 1800
equals Rs. space 144
Hence comma space amount space of space tax space received space by space government equals Rs. space left parenthesis 1200 plus 96 plus 144 right parenthesis equals Rs. space 1440

left parenthesis ii right parenthesis space Value space of space machine space paid space by space the space consumer
equals Price space charged space by space manufacturer plus Profit space of space wholesaler plus Profit space of space trader
equals Rs. space left parenthesis 15000 plus 1200 plus 1800 right parenthesis
equals Rs. space 18 comma 000
Tax space paid space by space consumer equals 8 percent sign space of space Rs. space 18000 equals 8 over 100 cross times 18000 equals Rs. space 1440
Therefore comma space amount space paid space by space cunsumer equals Rs. space left parenthesis 18000 plus 1440 right parenthesis equals Rs. space 19 comma 440 end style

Answered by  | 1st Sep, 2017, 04:49: PM

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