Profit Loss Involving Tax

We will discuss here how to solve the problems based on Profit loss involving tax.

1. A shopkeeper buys a DVD player at a rebate of 20% on the printed price. He spends $ 20 on transportation of the DVD player. After changing a sales tax 6% on the printed price, he sells the DVD player at $530. Find his profit percentage.

Solution:

Let the printed price be P. Then, the cost price = P – 20% of P

                                                                    = P – \(\frac{20P}{100}\) 

                                                                    = \(\frac{4P}{5}\).

Actual cost price including transportation cost = \(\frac{4P}{5}\) + $ 20.

The sales tax = 6% of P = \(\frac{6P}{100}\) = \(\frac{3P}{50}\)

Therefore, the selling price including sales tax = P + \(\frac{3p}{50}\)

According to the problem,

P + \(\frac{3P}{50}\) = \(\frac{53P}{50}\) = $ 530

\(\frac{53P}{50}\) = $ 530

Therefore, P = $ 500

Therefore, the actual cost price = \(\frac{4P}{5}\) + $ 20 = \(\frac{4 × $ 500}{5}\) + $ 20 = $ 420.

Therefore, profit = printed price – actual cost price = $ 500 - $ 420 = $ 80.

Therefore, profit percentage = \(\frac{$ 80}{$ 420}\) × 100% = \(\frac{400}{21}\)% = 19\(\frac{1}{21}\) %.

2. A seller buys a LED Televisions for $ 2500 and marks up its price. A customer buys the LED Televisions for $ 3,300 which includes a sales tax of 10% on the marked up price.

(i) Find the mark-up percentage on the price of the LED Televisions.

(ii) Find his profit percentage.

Solution:

Let the marked up price be P. Then, the sales tax = 10% of P = P/10.

Therefore, selling price = P + \(\frac{P}{10}\)

According to the problem, = $ 3300

Or, P ∙ \(\frac{11}{10}\) = $ 3300

Therefore, P = $ 3000.

Therefore, $ 2500 is marked up to $ 3000

Therefore, mark-up percentage = \(\frac{$ 300 - $ 2500}{2500}\) × 100%

                                               = \(\frac{500}{2500}\) × 100%

                                               = 20%

Now, the profit = marked up price – cost price = $ 3000 - $ 2500 = $ 500

Therefore, profit percentage = \(\frac{$ 500}{$ 2500}\) × 100% = 20%

● Sales Tax and Value Added Tax

• Calculation of Sales Tax
• Sales Tax in a Bill
• Mark-ups and Discounts Involving Sales Tax
• Profit Loss Involving Tax
• Value Added Tax
• Problems on Value Added Tax (VAT)
• Worksheet on Printed Price, Rate of Sales Tax and Selling Price
• Worksheet on Profit/Loss Involving Sales Tax
• Worksheet on Sales Tax and Value-added Tax
• Worksheet on Mark-ups and Discounts Involving Sales Tax

10th Grade Math

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