Question

Joe made sales of £33,300, excluding VAT and purchases of £33,300 including VAT. All sales and purchases are on credit and subject to VAT at 20%

What amount was recorded for receivables?

Answer 1

To calculate the amount recorded for receivables, subtract VAT from the sales amount.

Step-by-step explanation:

To calculate the amount recorded for receivables, we need to determine the VAT amount first. Since VAT is 20%, we can calculate it as 20% of the purchases:

VAT = 20% of £33,300 = £6,660

Now, to find the amount recorded for receivables, we subtract the VAT amount from the sales:

Amount recorded for receivables = Sales - VAT

Amount recorded for receivables = £33,300 - £6,660 = £26,640

Therefore, the amount recorded for receivables is £26,640.