QUESTION 3 Ms. Rennet is a retired advocate. She always wanted to be a business woman, but did not have the time to fulfil her dream. With the money that was paid out to her, she decided to start a business which specialises in selling handbags Ms Rennet buys the bags directly from the factory. Ms. Rennet must pay VAT (Value Added Tax) to the factory for the bags The factory has to pay the VAT to SARS (South African Revenue Service) When customers buy bags from Ms. Rennet they pay VAT to her and she has to pay VAT to SARS. PLEASE NOTE: Ms. Rennet will not pay all the VAT that she receives from her customers to SARS. The VAT that she has to pay to SARS is the difference between what she received from her customers and what she paid to the factory 3.1 Ms. Rennet buys 500 handbags from the factory at R 120 each (excluding VAT). She then sells the handbags to her customers for R 190 each (VAT inclusive) Calculate how much VAT the factory has to pay to SARS for the bags that 3.1.1 Ms. Rennet bought. (3) 3.1.2 How much VAT does Ms. Rennet receive from her customers for the bags? Ms. Rennet also has to pay SARS for the VAT she received from her customers. How much VAT will she pay to SARS? (5) 3.1.3 (3)