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can someone explain the working for this question to me I am struggling. i dont know where the 1.16 came from.
okay after much frustration I realized where the 1.16 came from. it is 116/100 //face palms//
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
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?
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.
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