Cease Fire (Pty) Ltd manufactures and distributes spray tans. Cease Fire have been registered for VAT...

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Cease Fire (Pty) Ltd manufactures and distributes spray tans. Cease Fire have been registered for VAT since 2018. Mr. Abraham wants to appoint you as the new Accountant; however, he first wants to test your VAT knowledge as it is an important output required from their Accountants. During its current two-month period (which ended on 30th April 2021) it entered into, amongst others, the following transactions. VAT is included unless otherwise stated. 1. Cease Fire sold two hundred crates of spray tan cans for cash to Wellness Spa Bar in Windhoek. 2. Cease Fire sold two truckloads (a truckload consists of 500 crates) on credit to Seabreeze Spa (Pty) Ltd situated in Walvis Bay. 3. Cease Fire sold and exported a 100 hundred crates of spray tan cans on credit to Tan-l-See (Pty) Ltd in Kang, Botswana. 4. On the 15 September Cease Fire purchased two new vehicles. A new delivery vehicle costing NS275 000 (VAT exclusive) and a new Corolla for the marketing manager, costing N$215,000 (VAT exclusive). Cease Fire will pay Indongo Toyota 30 days after the invoice date. 5. Wages for the cleaner amounted to N$3,000 per month. 6. Advertising, printing, relabelling and marketing related to the new improved spray tan amounted to N$546,250 (VAT inclusive) 7. Mr. Abraham adopted the practice where he will provide the employees with free office refreshments; this will create more productive employees. The costs of this benefit amount to N$2,500 per month (VAT Inclusive). These expenses are paid out of the petty cash register. NOTE Price list Spray tan cans per crate (100 cans in 1 crate) Amount (Incl. VAT) N$9,200.00 REQUIRED: Calculate Cease Fire (Pty) Ltd's VAT liability relating to the above specific transactions for the 2-month period ending 30 April 2021. (20) Cease Fire (Pty) Ltd manufactures and distributes spray tans. Cease Fire have been registered for VAT since 2018. Mr. Abraham wants to appoint you as the new Accountant; however, he first wants to test your VAT knowledge as it is an important output required from their Accountants. During its current two-month period (which ended on 30th April 2021) it entered into, amongst others, the following transactions. VAT is included unless otherwise stated. 1. Cease Fire sold two hundred crates of spray tan cans for cash to Wellness Spa Bar in Windhoek. 2. Cease Fire sold two truckloads (a truckload consists of 500 crates) on credit to Seabreeze Spa (Pty) Ltd situated in Walvis Bay. 3. Cease Fire sold and exported a 100 hundred crates of spray tan cans on credit to Tan-l-See (Pty) Ltd in Kang, Botswana. 4. On the 15 September Cease Fire purchased two new vehicles. A new delivery vehicle costing NS275 000 (VAT exclusive) and a new Corolla for the marketing manager, costing N$215,000 (VAT exclusive). Cease Fire will pay Indongo Toyota 30 days after the invoice date. 5. Wages for the cleaner amounted to N$3,000 per month. 6. Advertising, printing, relabelling and marketing related to the new improved spray tan amounted to N$546,250 (VAT inclusive) 7. Mr. Abraham adopted the practice where he will provide the employees with free office refreshments; this will create more productive employees. The costs of this benefit amount to N$2,500 per month (VAT Inclusive). These expenses are paid out of the petty cash register. NOTE Price list Spray tan cans per crate (100 cans in 1 crate) Amount (Incl. VAT) N$9,200.00 REQUIRED: Calculate Cease Fire (Pty) Ltd's VAT liability relating to the above specific transactions for the 2-month period ending 30 April 2021. (20)

Answer rating: 100% (QA)

To calculate Cease Fire Pty Ltds VAT liability for the 2month period ending 30 April 2021 we need to consider each transaction separately and identify ... View the full answer