Gst (1 Viewer)

[Paj20]

The total cost of a resturant meal was 123.75, including GST. Calculate the actual cost of the meal without tax.

Is the answer $112.50?

The books says something else...

 

[pLuvia]

123.75/1.1=112.5 unless the GST is something else

 

[PC]

Another way ...

The total amount is $123.75. This includes the cost of the meal as well as the 10% GST charge.
The cost is 100% of the cost.
The GST is 10% of the cost.
So the total amount is 100 + 10 = 110% of the cost.

Now 110% of cost = $123.75
So 1% of cost = 123.75 ÷ 110 = 1.125
Therefore 100% of cost = 1.125 x 100 = $112.50

So the cost before GST is $112.50.

I like this way as it's slightly easier to follow when the GST or VAT charge is something other than 10%.

And who knows how long it will stay as 10% in Australia!