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VAT The information relates to Mphati Enterprises owned by partners John, Jacob and Jerimiah - NSC Accounting - Question 2 - 2024 - Paper 2
Question 2
VAT The information relates to Mphati Enterprises owned by partners John, Jacob and Jerimiah. The business is registered for VAT. They buy and sell standard and zero... show full transcript
Worked Solution & Example Answer:VAT The information relates to Mphati Enterprises owned by partners John, Jacob and Jerimiah - NSC Accounting - Question 2 - 2024 - Paper 2
Step 1
2.1.1 Calculate the VAT amount on the goods sold by the business.
Answer
To calculate the VAT on the goods sold by the business, we first need to find the total sales amount, which is given as R839,800. The calculation for standard-rated products is as follows:
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Calculate total sales excluding zero-rated products:
ext{Standard-rated sales} = R839,800 - R182,000 = R657,800
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Calculate VAT for standard-rated products:
ext{VAT} = ext{Standard-rated sales} imes ext{VAT rate} ext{VAT} = R657,800 imes 0.15 = R98,670
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Include VAT for zero-rated products, which is 0:
ext{Total VAT} = R98,670 + 0 = R98,670.
However, another approach would be:
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Split the total sales into standard and zero-rated:
ext{VAT on standard-rated} = R548,000 imes 0.15 = R82,200
ext{VAT on zero-rated} = 0
Therefore, the total VAT amount is:
Total VAT = R82,200 + R0 = R82,200.
Step 2
2.1.2 Calculate the amount payable to or receivable from SARS on 30 April 2024.
Answer
To find out the amount payable to or receivable from SARS, we will compare the total VAT collected and paid:
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Total VAT collected from sales: R82,200.
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Amount due to SARS on April 1: R5,340.
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Calculate total payable:
ext{Payable} = ext{VAT collected} - ext{Amount due} ext{Total} = R82,200 - R5,340 = R76,860.
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Add the balances (debtors, discounts):
ext{Receivable} = R4,800 (debtors) - R31,510 (discounts) + R5,340 (opening balance)
Thus, the total alignments which affect VAT payable/receivable from SARS are:
- Total collected = R82,200
- Total amount payable/receivable = R82,200 + R5,340 - (R31,510 + R4,800) = R14,550.
Therefore, amount to be settled with SARS is R14,550.