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CASE STUDY PROGRAMME Bachelor of Commerce in Financial Management MODULE Taxation 2B YEAR Two (2) INTAKE January 2021 Semester 2 TOTAL MARKS 30 TAXATION 2B

CASE STUDY PROGRAMME Bachelor of Commerce in Financial Management MODULE Taxation 2B YEAR Two (2) INTAKE January 2021 Semester 2 TOTAL MARKS 30 TAXATION 2B (30 MARKS) QUESTION 1 (30 Marks) Hardin Smith is the owner of Staples (Pty) Ltd. The business is a registered VAT vendor and accounts for VAT on the invoice basis. The following information is an extract from the accounting records of Staples(Pty) Ltd for the December/January 2020 VAT period. Assume a standard VAT rate of 15%. All amounts include VAT unless VAT is not applicable. Transactions with non-vendors are indicated with an asterisk (*). Assume that all vendors have submitted valid source documents in accordance with the VAT Act (where applicable). Cheques issued: Cheque no. Particulars Allocation Amount (R) 201 ADT Supplies Trading inventory 4 468,75 202 Bella Boo Entertainment 165,00 203 Kalula Air travel expense 962,50 204 Insurance Life insurance 68,75 205 Natal Toxins Illuminating paraffin 137,50 206 Arthur Gibbs Delivery vehicle 16 500,00 207 Trendcool Staff water cooler 618,75 208 Plumbers and fitters Repairs and maintenance* 343,75 Debits on the bank statement: Debit order for monthly insurance account, R4 812,50 Stop order for internet account, R7 562,50 Debit order for Entertainment expense, R275,00 Credits on the bank statement: Direct credit for cash sales, R130 625,00 Received R618,75 from Jane in part payment of his account (no discount) Receipts not included above: On 7 January 2019, an amount of R75 625,00 was transferred from Russia for goods, which were sold and transported to a registered business in that country. On 15 January 2019 an original cash invoice was issued for consultation income, R1 718.75. On 20 January 2019 equipment was sold for cash, R7 796,25. On 26 January 2019 the business received an insurance pay-out on stock sold, R10 697,50 Other transactions Bad debts/credit losses written off, R35 598,75. Credit notes issued (on standard-rated goods previously sold), R117,15. On 12 January 2019 U. Ulengo purchased goods from Sagacious (Pty) Ltd for R27 500,00 on credit. The amount was still outstanding on 25 February 2019. Required: Calculate the total input and output VAT which Staples (Pty) Ltd can claim or account for on the above-mentioned transactions for December/January 2020. In your answer, please indicate the VAT implication of each line item, even if the particular answer is R nil.

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