AAT ASSESSMENT 2 TASK2

Amna

Hi, can anyone help me to explain the AAT ASSESSMENT 2 TAKS 2
SRV 20% APPLIES TO ALL SALES
the trader sells an item to a customer 405 including VAT calculate the original cost of the item to the trader, excluding VAT?
Thanks

Pian32

So you have a standard rate of VAT applied and the amount including VAT is 405. You want to find the amount excluding VAT.

AMount including VAT = (1+ VAT rate) * Amount excluding VAT

Excluding VAT = 405/1.2
=337.50

The question asks for the original cost which makes me think there is more to the question that hasn't been posted such as a mark up/margin required. As this would just be the sale price excluding VAT.

AM02

Ive had the same issue with this question. I put the answer as £337.50 but when you check the answers, it says the answer is £250?? is this an error?

AM02

I've just had a relook at the question from the beginning. It does state the business sells it goods at a mark up on cost of 35%. so if we work out the mark up of 35% to 405.
405 divided by 1.35 this give us £300.00. then work out the cost ex vat
300 divided by 1.2 which gives us £250.00

Amna

thanks

Amna

if inventory increase 560 and the total value of purchases given 22000, mark up 40%
how to calculate the value of purchases, sale and closing inventory?

Pian32

So theres a little bit of information missing. You'll need the opening inventory.

CoS = 22000-560 = 21440
Sales = 21440 *1.4 = 30016
Closing Inventory = Opening Inventory + 560

Amna

thanks