A business entity manufactures speciality furniture for hotels, hospitals and schools across South Africa. The entity uses the periodic inventory system and accounts for VAT by means of the invoice basis. Assume a standard VAT rate of 14%. Assume that all parties are registered VAT vendors and, where applicable, that all amounts are inclusive of VAT. The financial records of the business showed a credit balance of R60 000 in the VAT control account as at 1 December 2018. The following transactions occurred during the month of December 2018: a) Purchased inventory on credit from Company Y, R262 200.

b) Cash sales for the month amounted to R171 000.

c) Sold inventory on account to Company X for R182 400.

d) Bought R68 400 worth of computer paper, paid by cheque.

e) Received R45 600 cash from Company X in relation to sales in (c).

f) Paid salaries, R90 000.

g) Paid R3 000 interest on a loan and R13 000 of the initial loan.

h) Although the electricity bill for December, amounting to R18 240, had been received, the bill had not been paid by close of business on 31.December 2018. Required: 1.1 Prepare the journal entries to record the transactions for December 2018. You may ignore journal narrations. (11) 1.2 Prepare the VAT control account, as it would appear in the general ledger of the business for the month ended 31 December 2018. The account must be properly balanced.