Instructions: All answers must be typed in and workings must be shown

Question 2

Some friends, spotting an opportunity in the school sports market, decided to start a business supplying smaller-sized sports equipment and accessories. They operate as a close corporation, Just-A-Game cc and, because of a number of factors, only began operating on 1 January 2020 (their year-end is the end of February). The business exceeded all expectations, and took off at a tremendous rate. Just-A-Game cc achieved a total VAT-inclusive turnover of R1,464,900 for the tax year and is registered for VAT (Category B). They have been told by their bookkeeper that their qualifying tax deductions are R1,048,800 for the same period, that this number is inclusive of VAT, and that there were no capital purchases or expenditures.

Based on this scenario, answer the questions below. Ignore any timing issues with regard to when VAT should be paid.

2.1 How much of their turnover figure is VAT, and how much should be regarded as revenue for the company?

2.2 What block number would the turnover figure be reflected in on their VAT201 return? And what block number would the VAT from that be reflected in?

2.3 Assuming that all of their deductions carry VAT, how much of their deductions figure is VAT, and what proportion should be regarded as expenses for the company?

2.4 What block number would the VAT from expenses be reflected in, on their VAT201 return? What is the net VAT position for the VAT period, and is it a net VAT output, or a net VAT input?