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Using the information given on the invoice extract below, complete the three blank spaces - Junior Cycle Business Studies - Question 3 - 2022

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Using the information given on the invoice extract below, complete the three blank spaces. | € | |-------------------------| | Total (excludin... show full transcript

Worked Solution & Example Answer:Using the information given on the invoice extract below, complete the three blank spaces - Junior Cycle Business Studies - Question 3 - 2022

Step 1

Subtotal

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Answer

To calculate the Subtotal, deduct the Trade discount from the Total (excluding VAT).

The formula is:

Subtotal=Totalext(excludingVAT)−TradeextdiscountSubtotal = Total ext{ (excluding VAT)} - Trade ext{ discount}

Substituting the values:

Subtotal=30,000−3,000=27,000Subtotal = 30,000 - 3,000 = 27,000

Step 2

VAT (23%)

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Answer

Next, to calculate the VAT, apply the VAT rate (23%) to the Subtotal.

The formula is:

VAT=Subtotalimes0.23VAT = Subtotal imes 0.23

Substituting the value of Subtotal:

VAT=27,000imes0.23=6,210VAT = 27,000 imes 0.23 = 6,210

Step 3

Total (including VAT)

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Answer

Finally, to find the Total (including VAT), add the VAT amount to the Subtotal.

The formula is:

Totalext(includingVAT)=Subtotal+VATTotal ext{ (including VAT)} = Subtotal + VAT

Substituting the values:

Totalext(includingVAT)=27,000+6,210=33,210Total ext{ (including VAT)} = 27,000 + 6,210 = 33,210

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