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    Value-added tax (VAT)

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    XZ sells two types of product, A and B. A is standard rated for VAT purposes and B is zero rated. All purchases have incurred VAT at standard rate.

    XZ's sales (inclusive of VAT where applicable) for the three months to 31 March 2012 were:

    A 63,250
    B 24,150
    Total 87,400

    XZ's purchases for the three months to 31 March 2012 were $32,333 exclusive of VAT.

    Calculate the amount of VAT that XZ is due to pay for the three months to 31 March 2012.

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    Solution Preview

    In the VAT settlement, we deduct input VAT from output VAT. The resulting ...

    Solution Summary

    The amount of VAT payable is calculated as the difference between the output tax collected and input tax incurred in a sample question