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Using the information given on the invoice extract below, complete the blank boxes - Junior Cycle Business Studies - Question 1 - 2019

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Using the information given on the invoice extract below, complete the blank boxes. | | € | |----------------|--------| | Total (excluding VAT) ... show full transcript

Worked Solution & Example Answer:Using the information given on the invoice extract below, complete the blank boxes - Junior Cycle Business Studies - Question 1 - 2019

Step 1

Trade discount (12%)

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Answer

To calculate the trade discount, we multiply the total by the trade discount rate:

Trade Discount=25,000×0.12=3,000\text{Trade Discount} = 25,000 \times 0.12 = 3,000

Thus, the trade discount is €3,000.

Step 2

Subtotal

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Answer

The subtotal is the total excluding VAT minus the trade discount:

Subtotal=25,0003,000=22,000\text{Subtotal} = 25,000 - 3,000 = 22,000

Therefore, the subtotal is €22,000.

Step 3

VAT (23%)

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Answer

To calculate the VAT, we take the subtotal and multiply it by the VAT rate:

VAT=22,000×0.23=5,060\text{VAT} = 22,000 \times 0.23 = 5,060

Thus, the VAT is €5,060.

Step 4

Total (including VAT)

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Answer

The total including VAT is the subtotal plus the VAT:

Total (including VAT)=22,000+5,060=27,060\text{Total (including VAT)} = 22,000 + 5,060 = 27,060

Therefore, the total including VAT is €27,060.

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