Question

Assignment (AFACO2-6/S2 10/2020) Total: 70 marks Note to student: You will be penalised for the copying of theory without explanation/application to the scenario provided. You should use the theory in support of your own answer. Non-application will result in a zero mark being awarded SECTION A (70 MARKS) - PARAGRAPH QUESTIONS Answer the following questions: Question 1 (10 marks) The following information is given for Fine Furniture (Pty) Ltd, a VAT-registered vendor. VAT is at 15%. No. Mark-up or margin VAT @ 15% Cost price (VAT- inclusive) А 18 400 Selling price (VAT- exclusive) B 32 000 1 Selling price (VAT- inclusive) C 1 1 230 E F 2 50% on cost price D7% on selling price G?% on cost price H 4 000 4 600 3 2 300 J 1 800 13 800 4 I 25% on selling price Required: 1.1 Calculate the missing amounts represented by A to J in the table above. (10) Note: workings are not required. Round off all answers to the nearest rand.

Answer 1

No.	Cost Price (VAT Inclusive)	Mark- up or Margin	Selling Price(VAT - exclusive)	VAT @ 15%	Selling Price (VAT Inclusive)
1	6287	50% on cost price	8200	1230	9430
2	18400	50% on Selling price	32000	4800	36800
3	2300	100% on cost price	4000	600	4600
4	10350	25% on Selling price	12000	1800	13800
No. 1
	Vat @15%	1230
	Selling price ( VAT Exclusive)	8200	=1230/15%	(B)
	Selling price( VAT Inclusive)	9430	=1230+8200	( C)
	Mark- Up or Margin	50%
	Selling price ( VAT Exclusive)	150% of Cost
	Cost	=Selling price ( VAT Exclusive) /150%
	Cost (Exclusive VAT)	=8200/150%
		5467
	Cost (Inclusive VAT)	6287	=5466.67*1.15	(A)
No. 2	Selling price ( VAT Exclusive)	32000
	Vat @15%	4800	=15%*32000	( E)
	Selling price( VAT Inclusive)	36800	=32000+4800	( F)
	Cost (Inclusive VAT)	18400
	Cost (Exclusive VAT)	16000	=18400/1.15
	Markup	16000	=32000-16000
	Mark up% on Selling Price	50%	=16000/32000*100	( D)
No. 3
	Selling price ( VAT Exclusive)	4000
	Selling price( VAT Inclusive)	4600
	Vat @ 15%	600	=4000*15%	(H)
	Cost (Inclusive VAT)	2300
	Cost (Exclusive VAT)	2000	=2300/1.15%
	Markup	2000	=4000-2000
	Mark up% on Cost Price	100	=2000/2000*100	(G)
No.4
	Selling price( VAT Inclusive)	13800
	Vat @ 15%	1800
	Selling price ( VAT Exclusive)	12000	=1800/15%	(J)
	Mark up% on Selling Price	3000	=12000*25%
	Cost (Exclusive VAT)	9000	=12000-3000
	Cost (Inclusive VAT)	10350	=9000*1.15	(I)

Note - Fine Fortune Pty Ltd is a registered Vat Dealer, so they will get VAT Input on Purchase so this VAT input will not be the Part of Cost & Eligible for Input Credit.

Hence We have considered Mark- Up On cost & selling price Exclusive of vat.