Multiple choice

A manufacturer marks an article for Rs. 10,000. He sells it to a wholesaler at 40% discount. The wholsealer sells this srticle to a retailer at 20% discount on the marked price of the articles. If retailer sells the article to a customer at 10% discount and the rate of sales-tax is 12% at each stage, find the amount of VAT paid by the: (i) Wholesaler (ii) retailer

  1. $(i) Rs. 140$  $(ii) Rs. 200$
  2. $(i) Rs. 210$  $(ii) Rs. 180$
  3. $(i) Rs. 150$  $(ii) Rs. 100$
  4. $(i) Rs. 240$  $(ii) Rs. 120$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The wholesaler's input tax is 12% of Rs. 6,000 and output tax is 12% of Rs. 8,000, so VAT paid is Rs. 240. The retailer's input tax is Rs. 960 and output tax is 12% of Rs. 9,000, so VAT paid is Rs. 120.

AI explanation

The manufacturer sells to the wholesaler at a 40 percent discount, making the price 6000 with a tax of 720 at a 12 percent rate. The wholesaler sells to the retailer at a 20 percent discount on the marked price, making the price 8000 with a tax of 960. The VAT paid by the wholesaler is 960 minus 720 to equal 240. The retailer sells to the customer at a 10 percent discount, making the price 9000 with a tax of 1080, so the VAT paid by the retailer is 1080 minus 960 to equal 120. The result is 240 and 120.

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