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 stolen, 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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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

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 stolen, 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.