Assume a Vat rate of 15%

The transactions below appeared in the books of Nellies Traders for February 2020. The company uses the perpetual system to account for inventory and a 60% mark-up on cost. (All amounts are VAT inclusive unless otherwise stated)

Transactions for February:

3. Purchased goods on credit from TBP Manufacturers R9 430 and was offered a 10% settlement discount if payment is made within 10 days. Nellies Traders believed they would unfortunately not be able to meet the deadline of 10 days.

Sold goods on credit to BA Stores for R10 580, after a trade discount of 5% was negotiated.

5. Bought office equipment from Fray Ltd for R92 000, paid a 20% deposit and the balance on account.

9. Sold goods to Indigo on credit, with a cost price of R3 750.

Made a payment for repairs to equipment R1 725.

10. Due to a surprisingly good cash inflow, Nellies Traders paid TBP Manufacturers the amount owing to them.

14. Bought goods on credit from OB Traders R2 415 (including VAT) and from BB wholesalers for R2 500 (excluding VAT).

17. Paid salaries and wages R23 000.

19. Indigo returned goods of R2 185.

23. Sold goods for cash to Abacus Ltd and granted them a 5% discount. The original marked price of the goods was R10 120.

Received interest from Malans Financial Ltd on an investment R1 495.

You are required to:

1. Prepare the general journal entries in the records of Nellies Traders for the above transactions. (27 Marks)

2. Is there a VAT Recoverable or Payable at the end of the period and what is the amount? (2 marks)