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Dear Mr. John,
1. For exm , 590790 for tax on purchase exclusive
590790 *17.5/117.5 =87990 , how to get 117.5 form 17.5 in order to divide
2. is there any formula to get total tax=(sales – purchase )? and why the balance is on credit side?
Need your solution of above two question
Regards Victor
You have obviously not watched my free lectures on sales tax because I answer both of your questions in my lectures. Please do not expect me to type out my lectures here!!
1. If the net cost is 100 then the tax is 17.50 and the gross price is 117.50.
Putting it the other way round, for every 117.50 gross price, the tax is 17.50. Therefore the tax is 17.50/117.50 times whatever the gross price is.2. There is no formula. It is on the credit side if the tax on sales is more than the tax on purchases, because it is owed to the state. If the tax on purchases is more than the tax on sales then it is on the debit state because it is owed back to the company from the state.
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