An invoice shows the following: List price of goods = ₦120,000; Trade discount = 15%; VAT = 7.5%. What is the total amount payable by the buyer?

Net price after trade discount = ₦120,000 − (15% × ₦120,000) = ₦120,000 − ₦18,000 = ₦102,000. VAT = 7.5% × ₦102,000 = ₦7,650. Total payable = ₦102,000 + ₦7,650 = ₦109,650. VAT is always calculated on the price after trade discount has been deducted, not on the list price.