Self-test Martha owns a retail clothing store.

Martha’s trading during July showed that she had sold goods to Mrs Green for £820, plus VAT. She offered a 3 per cent cash discount for payment within 30 days. She also sold Miss Wydham goods to the value of £650 plus VAT. Here again a cash discount of 3 per cent was offered for payment by the end of August.

She purchased goods from Clothes & Co. The goods are priced at £4,800 but there is a trade discount of 20 per cent as well as a cash discount of 5 per cent for payment within 10 days. The goods are subject to VAT.

She also purchased goods from Jeans & Co. for £260 plus VAT. Here again a cash discount was offered of 5 per cent. Of the goods purchased from Jeans & Co., a dress for £94 plus VAT was returned as unsuitable.

VAT is calculated at 15 per cent unless the amount has been specified in the question.

You are required to prepare the VAT account at the end of July.