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# help please!

harryb
Feels At HomeRegistered Posts:

**62**
hey, im revising for the certificate at the moment and come across a question concerning sales invoice, hopefully you can make a specific part of this question clearer to me:

code descrip quantity vat unit price amount excl vat

950bb3 cotsworld panels 3 17.5% 300 900

159so4 insulation bricks 5 17.5% 195.50 977.50

874kl5 red brick roof tiles 1 17.5% 56.65 56.65

1934.15

trade discount 2% 38.68

1895.47

vat at 17.5% 321.75

total amount payable 2217.22

deduct discount of 3% if paid within 14 days

the vat is calculated as 17.5% x (1,895.47 x 0.97)..my question is where does the 0.97 come from??

any help would be appreciated.

:001_smile:

code descrip quantity vat unit price amount excl vat

950bb3 cotsworld panels 3 17.5% 300 900

159so4 insulation bricks 5 17.5% 195.50 977.50

874kl5 red brick roof tiles 1 17.5% 56.65 56.65

1934.15

trade discount 2% 38.68

1895.47

vat at 17.5% 321.75

total amount payable 2217.22

deduct discount of 3% if paid within 14 days

the vat is calculated as 17.5% x (1,895.47 x 0.97)..my question is where does the 0.97 come from??

any help would be appreciated.

:001_smile:

0

## Comments

62thanks again

2You need to deduct the 3% first because VAT is calculated after all discounts, regardless of whether they are taken or not.

I'll give you a small explanation of why multiplying by 98% is the same as finding 2% and then deducting:

Say you have an amount £x and you want to find the price after a discount of 2%.

First you would find 0.02 * x

Whatever that value is, you subtract from the initial price (x)

giving you x - 0.02x

= x (1 - 0.02) (algebraic manipulation, if you don't follow, give x a value)

= x * 0.98

where 0.98 = 98%

Hence after a 2% discount, you are left with 98% of the initial price.

Hope that makes sense!

:001_smile:

62