1.1
Amahle Traders is registered for VAT - NSC Accounting - Question 1 - 2020 - Paper 2
Question 1
1.1
Amahle Traders is registered for VAT. The standard VAT rate is 15%.
REQUIRED:
1.1.1 Calculate the figures indicated by (a) to (d) in the table below. (9)
1.1... show full transcript
Worked Solution & Example Answer:1.1
Amahle Traders is registered for VAT - NSC Accounting - Question 1 - 2020 - Paper 2
Step 1
Calculate the figures indicated by (a) in the table below.
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Answer
To calculate the VAT inclusive amount from the excluding VAT amount of invoices received from suppliers, we subtract the excluding VAT from the VAT inclusive amount:
89700−78000=11700
Step 2
Calculate the figures indicated by (b) in the table below.
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Answer
The discount received from suppliers is adjusted for VAT at the standard rate of 15%:
12 400 imes rac{15}{115} = 1 860
Step 3
Calculate the figures indicated by (c) in the table below.
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Answer
To find the total credit notes issued to customers, we calculate:
210 imes rac{15}{115} + 1 400 = 1 610
Step 4
Calculate the figures indicated by (d) in the table below.
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Comment on this practice and provide Amahle advice.
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It is unethical for Amahle to use money not earned by the business for personal expenses. As an agent of SARS, she must ensure timely and accurate payments. Failure to comply may result in penalties or an investigation into potential fraud. Thus, I advise her to keep proper records and ensure that true amounts are reported to avoid future complications.
Step 6
Use the table to indicate changes to the Creditors’ Ledger Account.
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The changes to the Creditors’ Ledger Account should be made according to the figures provided and reflecting the necessary transactions and adjustments.
For example:
Adjust for any discounts or corrections based on the provided data.
Step 7
What should the owner say to Bradley regarding this incident? Explain TWO points.
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The owner should inform Bradley that:
He must not take advantage of his position as this may lead to disciplinary action or termination.
All transactions must be authorized, and Bradley should not bypass existing protocols.
