2.1.1 Calculate the figures indicated by (a) to (d) in the table below - NSC Accounting - Question 2 - 2018 - Paper 1
Question 2
2.1.1 Calculate the figures indicated by (a) to (d) in the table below.
2.1.2 You are the internal auditor. The sole owner, Samson, used a business cheque to bu... show full transcript
Worked Solution & Example Answer:2.1.1 Calculate the figures indicated by (a) to (d) in the table below - NSC Accounting - Question 2 - 2018 - Paper 1
Step 1
(a) Calculate the amount of VAT on sales returns.
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Answer
To calculate the VAT on sales returns, we subtract the sales returns from the total sales.
The formula to calculate VAT is: VAT=extTotalimesextVATrate
Thus, for sales returns: VAT=1104−960=144
Step 2
(b) Calculate the VAT on the purchase of stock.
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Answer
To find the VAT on stock purchases, we use the formula: extVAT=extStockpurchasedimesextVATrate
Hence: extVAT=52600imes0.15=7890
Step 3
(c) Calculate the amount of VAT received from discounts.
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Answer
To determine the VAT received from discounts, we first need to compute: ext{VAT} = rac{ ext{Discount}}{(1 + ext{VAT rate})} imes ext{VAT rate}
So we have: ext{VAT} = rac{720}{1 + 0.15} imes 0.15 = 4 800
Step 4
(d) Calculate the VAT on cash sales.
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Answer
For cash sales, we calculate the VAT as follows: extTotalCashSales=112470−6325
Now apply the VAT calculation: ext{VAT} = rac{ ext{Total Cash Sales} imes ext{VAT rate}}{1 + ext{VAT rate}}
Thus: ext{VAT} = rac{(112 470 - 6 325) imes 0.15}{1.15} = 13 845
Step 5
Explain what you would say to Samson. Provide TWO points.
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Tax Evasion: I would explain to Samson that by attempting to record the vehicle as a business asset for personal use, he may be committing tax evasion. This is illegal and unethical, as it reduces the amount he owes to SARS for VAT.
Potential Consequences: I would inform him that he could face fines or imprisonment because this could be seen as a criminal offense. Additionally, it is essential to maintain a clear division between personal and business assets to avoid complications with tax authorities.
