Question 5.8 You are the bookkeeper of Milano Traders. 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. As the bookkeeper you have been provided with ONLY the source documents for the month of October 20.9 necessary for the preparation of the journals specified below. The business uses the perpetual inventory system and trading inventory is marked up by 40% on selling price before any given trade discounts, i.e. - the gross margin is 40% unless otherwise specified. IV, OCT", "CC' and 'JR' are the source document codes for re-numbered original invoices, re-numbered original credit notes, cheque counterfoils and journal vouchers respectively. Milano Traders does 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. Source documents of Milano Traders for the month of October 20.9: 178 Date Details Source document no. Description Amount (R) 1 Igloo (Pty) Ltd N201 Trading Inventory purchased. 31 875.00 4 Leak City CC435 Payment for business plumbing services (repairs and maintenance). 656.25 5 Igloo (Pty) Ltd OCT173 8 Cash CC436 Trading inventory returned to the supplier. Drew a cash cheque for petty cash. 2 868.75 24 375.00 9 Igloo (Pty) Ltd CC437 11 Maxi Suppliers CC438 Payment on account to igloo (Pty) Ltd. No settlement discount was received because the account was not paid in full. (Balance owing at the beginning of the month: R 4 781.00). Trading inventory purchased. 27 030.00 45 787.50 11 Gorton CC IV202 Trading inventory purchased. 34 500.00 12 B. Moodley JR254 B. Moodley contributed furniture and fittings to the business. (All legislative requirements have been met for the full VAT amount to be claimed). 22 500.00 13 Trent Traders CC439 13 BURTON N203 Trading inventory purchased: R 46 250.00 less a 10% trade discount. Purchase of packing materials. ? 14 The Paper Port CC440 16 Gorton CC OCT174 16 Trading inventory returned to the supplier. Cash purchase of printing paper (postage and stationery). 1 275.00 1350.00 Sony IV204 Purchased a staff room coffee machine for the purposes of staff entertainment. 3 450.00 7 012.50