i) Mr. Ali Ming is a hardware merchant. He purchases cement from Athi
Cement Ltd. which
he then sells to his customers. Both Ali Ming and Athi Cement Ltd.
require a profit margin of 20% on cost. Cement attracts 18% VAT. If
the cost of production by Athi Cement Ltd. is Sh.220 per bag of 50Kg.
At what price should Ali Ming sell a bag of cement including VAT?
( 5 marks)
(ii) What VAT is payable to the Collector of VAT by Mr. Ali Ming per 50
( 8 marks)