o QUESTION $1\mathrm{.}1(46$ marks, $83$ minutes$)$

Glamour $($Pty$)$ Ltd rents out theme costumes and eveningwear. The company is a registered vendor for VAT purposes, and it is registered on the invoice basis. The company makes only taxable supplies, and all transactions are conducted with registered VAT vendors, unless specifically stated otherwise. Where necessary, Glamour $($Pty$)$ Ltd obtained valid tax invoices and the required taxation documentation for all its transactions. Jan Letani$$l is one of the company's shareholders and a director.

The following information relates to some of the transactions that occurred during the tax period ending on $28$ February $2024($all amounts include VAT where applicable, unless specifically stated otherwise$)$:

Transaction $1$

During January $2024,$ some of the eveningwear, a fax machine and a computer were stolen from the business during a burglary. In February $2024,$ an insurance company paid an amount of R$128000$ to the company as partial compensation for the eveningwear. A fax machine to the value of R$6000$ was also replaced by the insurance company. The total insurance premium paid for all the company's assets for the period January and February $2024$ is R$1100.$

Since the above insurance claim took a long time to be finalised, Mr Letaniell decided to sell his personal computer to the company on $25$ February $2024$ for use in the business. The company paid Mr Letani$$l the market value for the computer on $25$ February $2024.$

The selling price was R$8000($the market value as at $25$ February $2024).$ Mr Letani$$l originally purchased the computer for R $10500.$ He used the computer $80\%$ for business purposes as from $25$ February $2024.$ The company also purchased an antique mirror for business use from Mr Letani$$l$\text{'}$s mother for R$5000$ and paid the full amount on this date.

Transaction $2$

On $1$ January $2024,$ Glamour $($Pty$)$ Ltd purchased a second$-$hand delivery truck from a non$-$vendor for R$170000$ and paid the amount in full. The market value of the truck on date of purchase was R$175000.$ This truck was granted to the supervisor for use as a "company car" from the date of purchase. Glamour $($Pty$)$ Ltd bears the full cost of fuel and maintenance for this vehicle. During January $2024,$ the fuel cost for this truck was R$2550.$ This truck was stolen on $31$ January $2024$ and an indemnity award of R$150000$ was received from its insurers on $12$ February $2024.$ To replace the stolen truck, Glamour $($Pty$)$ Ltd purchased a new double$-$cab bakkie from a vendor on $14$ February $2024$ for R$220000.$ The supervisor was not allowed to use this vehicle as a company car.

Transaction $3$

Glamour $($Pty$)$ Ltd acquired a portable sound system on $30$ April $2023$ from a vendor for R$4500,$ to create a pleasant atmosphere for clients while shopping $($not regarded as entertainment$).$ This sound system was used $70\%$ for business purposes and the correct amount of input VAT was claimed at the time of purchase. Mr Letani$$l decided on $10$ January $2024$ that he would take the

QUESTION $1\mathrm{.}1($continued$)$

sound system to his home permanently to be used wholly for private purposes. The market value of the sound system on $10$ January $2024$ was R$5000.$ On $15$ January $2024,$ Glamour $($Pty$)$ Ltd acquired a new sound system for R$6000,$ which is used $100\%$ for business purposes.

$\backslash$table$[[$REQUIRED:$,$Marks$],[$a$)$ Show the journal entries for Transaction $1$ and $2.$ Provide reasons specifi$-,27],[$cally related to the VAT entries.,$20],[$b$)$ Calculate the VAT payable by$,$ or refundable to Glamour $($Pty$)$ Ltd for the tax,$],[\backslash$table$[[$period that ends on $28$ February $2024($show each transaction separately$).],[$Show all calculations and clearly indicate, supported with a reason in words,$],[$for notiming input tax or for not levying output tax on specific items.$]],20]]$