Question

Determination of VAT Amount

A VAT registered business shows the following records:

Total sales invoice inclusive of VAT 1,344,000

Total purchase invoice inclusive of VAT 840,000

Total non-VAT purchases 12,100

Compute for the following:

1.Output Tax

2.Input Tax

3.Total Sales exclusive of VAT

4.Total Purchases exclusive of VAT

5.VAT payable

Answer the following and explain!

(Taxation in Philippines)

Answer 1

Total sales invoice inclusive of VAT 1,344,000

Total purchase invoice inclusive of VAT 840,000

Total non-VAT purchases 12,100

(1)

Sales inclusive of vat=1344000

VAT =12%

Output Tax = (1344000/112)*12

=144,000

(2)

Purchase inclusive of vat=840000

VAT rate =12%

input tax =(840000/112)*12

=90,000

(3)

Sales inclusive of vat =1344,000

vat=144000

Sales exclusive of vat =1,344,000-144000

=1,200,000

(4)

Purchase inclusive of vat=840000

vat=90,000

Purchase exclusive of vat=840000-90000

=750000

Total purchase = VAT purchase+ non VAT purchase

=750000+12100

=762100

(5)

VAT Payable= Output VAT - Input VAT

=144000-90000

= 54000