Forums › FIA Forums › FA1 Recording Financial Transactions Forums › BPP Textbook – Sales tax account example clarification
- This topic has 2 replies, 2 voices, and was last updated 6 years ago by sajid007.
- AuthorPosts
- August 5, 2016 at 12:08 pm #331598
Hello,
Can someone, please, explain to me how did they get the input tax on cash purchases and output tax on cash sales amounts?
I am referring to the BPP textbook example on page 69.I am trying to figure out how those amounts were calculated…
Thanks in advance.
August 5, 2016 at 12:14 pm #331599Hi, it’s OK I have just found the answer!:) The answer is in the cash book page 71…
August 7, 2018 at 6:26 pm #466623Hey bro
U can calculate the The both kinds of tax in both kind of Transactions through the following formula it will be helpful
1st: amount given Multiply by Tax Percentage Devised by 100((( this formula is for Exclusive Tax)))
2nd: amount given Multiply by Percentage given devided by 100%+Given percentage((( the Formula is For Inclusive Tax)))
Example For Exclusive Tax: Purchase is $100 and Tax is 20% calculate the tax amount?
100×20/100%=20. ((20+100=120gross amount))
Example for Inclusive Tax the same example: Amount is 120 inclusive tax and tax rate is 20%
120×20/120=20. ((120-20=100 net price))
Wish will be helpful - AuthorPosts
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