A client by the name of Lucas want help and he instructs you to collect R500 000 from Marcus, and gives you a covering deposit of R10 000 in cash. You instruct and pay tracing agent R1 000. You charge a letter of demand and summons fees of R1 000. Marcus pays an amount of R200 000, and you charge a collection fee of R2 000.

REQUIRED:

1. Record the abovementioned transactions in your accounting records.

2. Transfer whatever you are entitled to transfer to your business account and; 3. Account fully to your client but retain the deposit to cover future fees and disbursements;

4. Prepare an accounting statement and make provision for VAT on your fees at 15%