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1.) Discuss the Reciprocity Rule

1.) Discuss the Reciprocity Rule

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1.) Discuss the Reciprocity Rule 2.) Explain the rules governing deductions The Smoky Corporation, a VAT-registered company, imported goods worth P 900,000 paying thereon the corresponding tax. The Smoky Corp. sold the goods at 25% mark-up to the Cloudy Corporation, a wholesaler, the latter paying a total of P. including the VAT. Cloudy Corp., in turn disposed the goods at 30% mark-up to Thunder Co., a retailer, which paid a total of P_--- Finally, the goods were sold to Lionel, the ultimate consumer at 25% mark-up. 1. Compute the value-added tax paid by Smoky Corp., Cloudy Corp., and Thunder Co., the VÁT shouldered by Lionel. 2. Fill in the blanks above and show your computations. including the VAT.
Transcribed Image Text:1.) Discuss the Reciprocity Rule 2.) Explain the rules governing deductions The Smoky Corporation, a VAT-registered company, imported goods worth P 900,000 paying thereon the corresponding tax. The Smoky Corp. sold the goods at 25% mark-up to the Cloudy Corporation, a wholesaler, the latter paying a total of P. including the VAT. Cloudy Corp., in turn disposed the goods at 30% mark-up to Thunder Co., a retailer, which paid a total of P_--- Finally, the goods were sold to Lionel, the ultimate consumer at 25% mark-up. 1. Compute the value-added tax paid by Smoky Corp., Cloudy Corp., and Thunder Co., the VÁT shouldered by Lionel. 2. Fill in the blanks above and show your computations. including the VAT.
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