AAT Unit 30 Questions Sales receipts

The answer explains how to do it :

This is quite a trick question! Remember that VAT is charged on the net figure after discount, whether or not discount is actually taken. The easiest way to check in practice, would be to look at the breakdown on the invoice!

(basically you need to know the net to get the vat, rather than the gross)

VAT = Net x 95% x 17.5%
Gross = Net + (Net x 0.95 x 0.175)
= Net + (Net x 0.16625)
= 1.6625 x Net
Net = Gross /1.16625
= 933.00/1.16625
= £800.00
VAT = 0.175 x 0.95 x £800
= £133.00

Payment required = (0.95 x £800.00) + £133.00 = £893.00

Hope this helps

The calculation from net as 800 to gross = 933 doesn’t make sense. I’ve been looking at this for a little while, and your probably correct.

An easier way to do this would be. Say £120 Gross, (VAT is 20%) To find net you say that gross £120 = 120% and to find net which is 100% you would then 120/120 = 1 x 100 = 100 Net.

So using this formula. (Rough quick calculations) 933/117.5 x 100 = 794.042
Net = 794.042

Take away 5%. Net – 5% = 794.042 – 39.7021 = 754.3399

+ VAT @ 17.5% 754.4 + 132.02 = 886.42

Which is very near your answer. We can only assume that the gross was supposed to be 940, otherwise the calculations become much harder for what was supposed to be a quick question.

Hope THIS helps more than my last post and thanks for posting 😀

I’ve realised! The £133 in the question is £800 + £133 = £933!! Looks like an easy error to make

( Please read @admin. Regarding the Sales Receipts Question 11 – Gross should be 940 and the calculation is wrong. Check out the formula I use, it’s perhaps a better example to show in the answer! )

Gross 940 as 117.5%
Gross / 117.5 x 100 = NET

940 / 117.5 = 8
8 x 100 = 800
Net = 800

800 – 5% discount
800 – 40 = 760
760 = New Net

760 + 17.5% VAT = Answer.
760 + 133 = 893