- August 5, 2016 at 12:08 pm
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
Hi, 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
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
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