VAT The following relates to Lunga Stores for the VAT period ended 30 April 2020 - NSC Accounting - Question 2 - 2020

For purchases of stock, the VAT calculation is as follows:

1. The purchases of stock total R200 000.

2. The VAT is calculated as:

   $$VAT = Purchases \times 0.15 = R200 000 \times 0.15 = R30 000$$

3. Effect on amount payable to SARS: This amount increases the amount that can be claimed back from SARS.

The VAT amount for drawings of stock:

1. The drawings of stock amount R32 000.

2. The VAT is:

   $$VAT = Drawings \times 0.15 = R32 000 \times 0.15 = R4 800$$

3. Effect on amount payable to SARS: This amount will also increase the input VAT claim.

To determine the VAT effect for bad debts:

1. The bad debts amount is R7 015.

2. The VAT is:

   $$VAT = Bad \ Debts \times 0.15 = R7 015 \times 0.15 = R1 575$$

3. Effect on amount payable to SARS: This amount decreases the total payable to SARS as it represents a loss of income that cannot be claimed.