QUESTION 1

Harry's Meat Cart, a registered VAT vendor, has several debtors and creditors. All debtors and creditors are registered for VAT, and deal in standard rated supplies. VAT is charged at 15%. The following balance appeared in the books of Harry's Meat Cart on 1 March 2020:

Carl Niemand (Debtor) (D1250) Dr Balance R 22 580

Date Details of transaction

______________________________________________________________________________________________________

1 Sold goods on credit to Carl Niemand, R 35 220 (including VAT).

_______________________________________________________________________________________________________

4 Realised that the previous invoice was undercast by R 400 (including VAT).

Mr Niemand was contacted in this regard and he accepted the corrected amount.

________________________________________________________________________________________________________

7 Carl Niemand settled his account balance as at 1 March 2020 (R 22 580) and took

advantage of the 2% settlement discount Harry's Meat Cart had offered him for

prompt payment. Round to the nearest rand.

____________________________________________________________________________________________________________

15 BBA Bank informed Harry's Meat Cart that Carl Niemand's cheque, received on the 7th was

dishonoured due to insufficient funds.

_____________________________________________________________________________________________________________

23 Carl Niemand bought good on credit, R 14 150 excluding VAT.

_____________________________________________________________________________________________________________

28 Carl Niemand returned goods purchased on the 23rd for R 2 750 (including VAT)

_____________________________________________________________________________________________________________

30 Carl Niemand's lawyer informed Harry's Meat Cart that Carl Niemand had been liquidated. His lawyer

sent a cheque constituting a payment of 50 cents in the rand. The rest of the debt was written off.

_____________________________________________________________________________________________________________

Required:

Prepare the individual account of Carl Niemand (D1250) in the debtors ledger of Harry's Meat Cart from the information provided above for the month of March 2020.

Round to the nearest rand.

Note: In the "Document Number" column in youranswer booklet provide only the correct name of the document, document numbers and transaction codes are not required.

QUESTION 2

Hollow Oaks Dealers is run by Harry Hollow, a sole trader. Hollow Oaks Dealers is a general dealer who uses the perpetual inventory system. A constant markup of 20% on cost price is used.

The business is a registered VAT vendor and trades only with registered VAT Vendors.

The business charges 15% VAT on all its sales. All amounts are inclusive of VAT unless VAT is not applicable.

They deposit any monies received on the same day.

Hollow Oaks Dealers do not expect to award any settlement discounts, nor does it expect to qualify for any settlement discounts. All settlement discounts are therefore deemed to be incidental in nature.

Transactions, amongst other for March 2020:

Date Details of the transactions

1 Sold inventory on credit to Nandi Traders Ltd, credit invoice

(CI03) for R 45 000 (excluding VAT).

________________________________________________________________________________________________________

3 Received business rent from G. Howard, R 6 540.

_________________________________________________________________________________________________________

8 Weekly cash sales of inventory, R 258 000

Nandi Traders Ltd returned unwanted goods, R 3 200 (excluding

VAT) see 1 March 2020.

____________________________________________________________________________________________________________

15 Owner took inventory for own use, cost R 15 400.

____________________________________________________________________________________________________________

23 Sold Inventory on credit to R. Lathebe, R 76 430.

____________________________________________________________________________________________________________

27 Nandi Traders paid R 27 800 towards her outstanding account.

____________________________________________________________________________________________________________

30 R. Lathebe has been declared insolvent. A cheque of 40 cents in

the rand for the amount purchased on 23 March was sent by his

lawyer on 30 March 2020. The balance will need to be written off.

____________________________________________________________________________________________________________

Required:

Use the relevant transactions given above, to complete the following journals and general ledger accounts:

Document numbers are NOT required.

Round to the nearest rand.

a) The Debtors Journal for March 2020. Total only the sales and cost of sales columns.

b) The Debtors Allowances Journal for March 2020. Total only the sales and cost of sales columns.

c) The Cashbook Receipts for March 2020. Total only the sales and cost of sales columns. (Analysis of receipts not required.) Remember they deposit any monies received on the same day.

d) The Sales Account, which has an opening balance of R 242 340. Balance the account. Settlement discounts amounting to R 2 870 (including VAT) has also been granted to debtors during March 2020.

e) The Cost of Sales Account which has an opening balance of R 152 000. No balancing of this account required.