Compute VAT for each Corporations.
Explanation of Solution
VAT: Value-Added-Tax (VAT) is a kind of tax that is levied on the incremental value of the goods under process in any stage of production.
In this it is required to find out the value added to the entertainment videos by each of the Incorporation and compute the VAT on those value.
Calculate the value added by Incorporation Q and the VAT on it, as follows;
Calculate the value added by Incorporation R and VAT on it, as follows;
Therefore, the VAT for Incorporation Q and Incorporation R is $1,116,000 and $372,000 respectively.
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Chapter 1 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
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