In Denmark, VAT is applied at a rate of 25%, with few exceptions. Vendor A sells raw

Question:

In Denmark, VAT is applied at a rate of 25%, with few exceptions. Vendor A sells raw materials to vendor B for $60,000 plus VAT, vendor B sells a product to vendor C for $130,000 plus VAT, and vendor C sells an improved, value-added product to an end user for $250,000 plus VAT. Determine the following.

(a) The amount of VAT collected by vendor B.

(b) The amount of tax vendor B sends to Denmark's Treasury.