VAT??? Please Help?

Hi,

I have just started the AAT Foundation course at the end of October 2009, and i am currently working on Unit 1. I am finding the course really interesting and it does seem to be getting harder, however i am abit confused with calculating VAT on sales invoices.

I thought i was calculating the VAT correcting but i have just checked the answers on a mock simulation of unit one to notice the VAT amount is not the same as mine.

The method i am using is:

VAT @ 17.5%

1. 17.5 divided by 100 multipy by (goods total) 370.00 is: 64.75

But this dont seem to be correct, the answer is suppose to be: 62.80

Can anyone help?? Where am i going wrong????

Thanks,
Merisa

Comments

  • Stokie24Stokie24 Just Joined Posts: 3Registered
    Hi Merisa
    I'm with you I get 64.75 as well so all I can think of is that there may be settlement discount applicable on the invoice and the VAT is representative of the lower figure.
    Stokie24
  • merisajohnsonmerisajohnson Just Joined Posts: 3Registered
    Thanks for the help and quick response!!!!

    I am so happy that i am calulating the VAT the correct way. It was noted in the simulation that a 3% settlement d/c does applies but i didnt know i had to calculate this in the invoice. I thought i would just include the discount figure at the bottom of the invoice incase they dont settle and make payment within the settlement period.

    Silly me, hey!!

    This double entry booking is completely new to me as i started the course with no knowledge or experience, but i think i will soon get the hang of this.

    Thanks again Stokie24 for your help.

    Merisa
  • MargaMarga Experienced Mentor Posts: 981Registered
    Hi Merisa


    370-3% discount = 358.90

    VAT of this at 17.5% is 62.80

    which you then add it to the 370



    Hope this helps if it is not too late
  • sabrina1981sabrina1981 Just Joined Posts: 3Registered
    I started AAT NVQ2 in September. When it came to receiving payments, the ESD confused me too. When preparing the invoices, you calculate the early settlement discount on the VAT as it is assumed the customer will take advantage of the Early Settlement Discount. When the customer pays the the invoice they will take off the ESD from the invoice total and pay the balance. If they don't pay within the the time the ESD applies, they just pay the invoice total. The VAT remains that the lower amount as per the original calculation.

    This confused the hell out of me at first, but I think i'm getting now (hopefully)
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