Confused here

Total sales price = 235 + 59.25 + 70 = 364.25

Remember: Gross price = Net price + Sales tax
117.5 = 100 + 17.5

Therefore, the ralationship between sales tax and gross payments = 17.5/117.5

364.25 x 17.5/117.5 = 54.25.

Here’s the explanation:

VAT is applied on NET AMOUNT, then both the VAT & NET AMOUNT are added, resulting GROSS AMOUNT, i.e.
NET AMOUNT $100
VAT @17.5% + $17.5
GROSS AMOUNT = $117.5

Now, lets understand the PERCENTAGES of these amounts.
As, the % of VAT is applied on NET AMOUNT, so the NET AMOUNT should be 100%. Adding both the percentages will result in the % of GROSS AMOUNT, i.e
Net Amount 100%
VAT + 17.5%
Gross Amount = 117.5%

All of the % are based on NET AMOUNT. So, if you’ll apply the % of VAT or GROSS on NET AMOUNT, you’ll get their respective amounts (figures).
VAT=17.5% of NET AMOUNT=17.5%*100=$17.5
GROSS=117.5% of NET AMOUNT=117.5%*100=$117.5

So, using these % calculations, shortcuts for calculations of VAT, NET & GROSS are made (there is a long derivation behind those, not necessary, but if you want, then i can explain that as well). The one used in this question is this:
VAT (amount) = GROSS (amount) x 17.5% / 117.5%
The rest are:
GROSS (amount) = VAT (amount) x 117.5% / 17.5%
NET (amount) = VAT (amount) x 100% / 17.5 %

Remember these shortcuts & the calculations will be much easier.

Correct.