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Sale Tax Question

+2 Votes
Sale Tax Question

Sale Value 50
Trade discount 5
Cash discount 8
Tax rate 17.5%
Value inclusive of sale tax ??????

May 15th 2015 AN ACCA USER 3,210 Points

13 Replies

0 Votes

sales tax rule says always use the net amount to calculate the sales tax.i.e after deduction of all discounts trade and cash dicounts.so the calculation is as follows:
50-5-8=37*17.5/117.5= 5.51(sales tax)

May 16th 2015 AN ACCA USER 690 Points
0 Votes
I said what is value inclusive of tax not the tax
May 16th 2015 AN ACCA USER 3,210 Points
0 Votes
50-5.51=44.49 is the value of goods before any discount
May 16th 2015 AN ACCA USER 690 Points
0 Votes
Wrong answer
May 16th 2015 AN ACCA USER 3,210 Points
0 Votes
your question is so ambiguos.kindly clear the requirement.
May 16th 2015 AN ACCA USER 690 Points
0 Votes
My question is the amount inclusive of tax (including tax)
May 16th 2015 AN ACCA USER 3,210 Points
0 Votes
which amount ? sales tax amount ? the amount of goods before discounts or after discounts?
May 16th 2015 AN ACCA USER 690 Points
0 Votes
The amount after tax and discounts
May 16th 2015 AN ACCA USER 3,210 Points
0 Votes
then answer is 37-5.51=31.49
May 16th 2015 AN ACCA USER 690 Points
0 Votes

43.5 is the correct answer?

May 21st 2015 AN ACCA USER 410 Points
0 Votes
I guess this is right!
May 25th 2015 AN ACCA USER 1,160 Points
0 Votes

First, deduct the trade discounts from price: 50-5=45 then deduct cash discount: 45-8=37
Then calculate vat: 37*17.5%=6.475
And Now the last part, the value of invoice or The Value inclusive of sales tax= 45 + 6.475=51.475

September 10th 2015 AN ACCA USER 280 Points
0 Votes
u can check the Kaplan text book of FA1 or FA2. there is a same question on the sales tax chapter.
September 10th 2015 AN ACCA USER 280 Points
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