Question

ABC suppliers sold a machine for Rs 200,000 excluding 13% VAT to PQR suppliers. If PQR suppliers sold the machine including Rs 4,000 transportation cost, Rs 3,000 local tax, and Rs 5,000 profit to the consumer, find the VAT amount and the final price for the consumer. What did PQR suppliers pay to ABC suppliers?

a) Rs 200,000
b) Rs 210,000
c) Rs 225,000
d) Rs 184,000

Answer 1

The VAT amount is Rs 26,000 and the final price for the consumer is Rs 226,000. PQR suppliers paid Rs 174,000 to ABC suppliers.

Step-by-step explanation:

To find the VAT amount and the final price for the consumer, we need to calculate the amount of VAT paid by PQR suppliers and add it to the initial price of the machine.

First, we find the VAT amount paid by PQR suppliers.

The initial price of the machine is Rs 200,000.

This price does not include VAT. We can calculate the VAT amount by multiplying the initial price by the VAT rate:

Rs 200,000 * 13% = Rs 26,000.

Next, we add the VAT amount to the initial price to find the final price for the consumer:

Rs 200,000 + Rs 26,000 = Rs 226,000.

Therefore, the VAT amount is Rs 26,000 and the final price for the consumer is Rs 226,000.

To determine what PQR suppliers paid to ABC suppliers, we subtract the VAT amount from the initial price: Rs 200,000 - Rs 26,000 = Rs 174,000.

So, the correct option is d) Rs 184,000