Question

Value Added Tax (VAT) must be ignored.

QUESTION 2 VALUE ADDED TAX (VAT) The totals of the journals provided below were extracted from the records of Musi Traders, a registered VAT vendor, for June 2016. Musi Traders commenced operations on 01 June 2016. VAT is levied at 14%. None of the products sold by Musi Traders are zero-rated or VAT exempt. REQUIRED Post to the following accounts in the General Ledger: 2.1 VAT Input 2.2 VAT Output 2.3 Debtors Control Note: The VAT Input and Vat Output accounts must be closed off to the SARS: VAT account. The Debtors Control account must be balanced. INFORMATION Cash Receipts Journal VAT Output Sundry accounts Bank 74 352 Debtors 5200 Discount Allowed 200 Sales 15 000 DR 28 CR 2380 Amount 52 000 Cash Payments Journal VAT Input Sundry accounts Bank 30 478 CR Purchases 8 000 Discount Received 300 Creditors 15 000 DR 1820 Amount 6 000

Answer 1

Answer:

Sales Journal Debtors VAT Output Sales control 1,680 12,000 13,680

Explanations:

VAT Output = 12,000 × 14% = 1,680

Sales Return Journal Debtors VAT Output Sales control 400 56 456

Explanations:

Debtors control = Sales return + VAT Output

456 = Sales return + (Sales return × 14%)

Sales return = (456 × 100) / 114 = 400

VAT Output = Sales return × 14% = 400 × 14% = 56

Date Details Fol Debit Credit Stationery VAT Input 4,500 15 630 ST Stationerys/Creditors control 5,130

Explanations:

Creditors control = Stationery + VAT Input

5,130 = Stationery + (Stationery × 14%)

Stationery = (5130 × 100) / 114 = 4,500

VAT Input = Stationery × 14% = 5,130 × 14% = 630

VAT Input 1,820 Bank 980 Creditor control Bank 42 Creditor control 70 630 VAT control Creditor control 3,318 3,430 3,430 VAT Output 28 Bank Bank 2,380 56 Debtor control Debtor control 1,680 VAT control 3,976 4,060 4,060