Question

aelyn Graham ACCO 124 Quiz #1 1. Consider the following transactions: RDK Manufacturers sold twenty-four (24) cases of cooking oil to Rhonda's Wholesale at a cost of $80 per case. Rhonda's Wholesale then sold twenty-two (22) cases to a retailer, Jacob at a cost of $90 per case. Gerald, a consumer, buys five (5) cases from Jacob at a cost of $100 per case. o Gerald was given a 10% cash discount All transactions are subject to Value Added Tax (VAT) at 15%. a. What is Gerald's total cost? (2 marks) b. How much VAT did Gerald pay? (2 marks) C. How much VAT does RDK Manufacturers pay to the government? (2 marks) d. How much VAT does Rhonda's Wholesale pay to the government for the 22 cases sold? (4 marks)

Answer 1

Answer a)	Gerald' Total Cost=517.5
		Cases	Rate	Amount
	Sales	5	100	500
	Cash Discount			50
	Net Sales			450
	VAT @15%			67.5
	Total Cost			517.5
Answer b)	VAT paid by Gerald=67.5
	Net Sales			450
	VAT @15%			67.5
Answer c)	VAT paid by RDK Manufacturers is 288
		Cases	Rate	Amount
	Sales	24	80	1920
	VAT @15%			288
Answer d)	VAT paid by Rhonda's Wholesale is 9
		Cases	Rate	Amount
	Sales	22	90	1980
	VAT @15%(A)			297
	Purchase	24	80	1920
	VAT @15%(B)			288
	Net VAT paid(A-B)			9