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Fa1, chapter 1 test question 7

Forums › FIA Forums › FA1 Recording Financial Transactions Forums › Fa1, chapter 1 test question 7

  • This topic has 7 replies, 4 voices, and was last updated 2 years ago by mrjonbain.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • January 19, 2022 at 6:58 pm #647050
    shanx3
    Member
    • Topics: 1
    • Replies: 2
    • ☆

    can someone explain the working for this question to me I am struggling. i dont know where the 1.16 came from.

    January 19, 2022 at 8:00 pm #647056
    shanx3
    Member
    • Topics: 1
    • Replies: 2
    • ☆

    okay after much frustration I realized where the 1.16 came from. it is 116/100 //face palms//

    January 19, 2022 at 8:16 pm #647057
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10589
    • ☆☆☆☆☆

    Net cost before discount = 3,000
    After the 20% discount the net cost is 80% x 3,000 = 2,400.

    Sales tax of 16% has to be added: 16% x 2,400 = 384

    Gross cost = 2,400 + 384 = 2,784

    Or, gross cost = 2,400 x (1 + 0.16) = 2,400 x 1.16 = 2,784

    January 20, 2022 at 1:03 am #647071
    shanx3
    Member
    • Topics: 1
    • Replies: 2
    • ☆

    Thank you so much for replying! I really appreciate the lay out above, as I understand it better. Can you help me with the working for q8? how and why is it 3600 to be paid to the government?

    January 20, 2022 at 10:01 am #647107
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10589
    • ☆☆☆☆☆

    If it made no purchases, the sales tax of 4,600 has to be paid to the government.

    However, purchases (including 20% tax) of 6,000 were made. The net price would be 6,000/1.2 = 5,000 and the tax is 1,000 (check: net = 5,000 and tax is 20% of 5,000 = 1,000 so fross price is 6,000).

    Tax on purchases can be offset against tax on sales therefore 4,600 – 1,000 = 3,600 to be paid.

    March 13, 2023 at 3:29 am #681203
    Zohal.kabul
    Participant
    • Topics: 0
    • Replies: 4
    • ☆

    Hello,
    What does double entry book keeping mean?
    And what does capital mean?

    March 13, 2023 at 9:54 am #681220
    mrjonbain
    Moderator
    • Topics: 6
    • Replies: 2427
    • ☆☆☆☆☆

    Zohal.kabul, welcome to the Opentuition forums. Answering what double entry is would be difficult in a few paragraphs. I will try to direct you to relevant resources on this site. I think given your first question (within the context of the accounting equation and double entry) Capital would be defined in the following wa(as per ACCA definition)- ‘the residual interest in the assets of a business after deducting all of its liabilities’. Hope this helps.

    March 13, 2023 at 10:05 am #681223
    mrjonbain
    Moderator
    • Topics: 6
    • Replies: 2427
    • ☆☆☆☆☆

    Zohal.kabul, please also see following link which I believe is linked to the course in which you are undertaking-

    https://opentuition.com/fia/fa1/

    Hope this helps.

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