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VAT The information relates to Mphati Enterprises owned by partners John, Jacob and Jerimiah - NSC Accounting - Question 2 - 2024 - Paper 2
Question 2
VAT The information relates to Mphati Enterprises owned by partners John, Jacob and Jerimiah. The business is registered for VAT. They buy and sell standard and zer... show full transcript
Worked Solution & Example Answer:VAT The information relates to Mphati Enterprises owned by partners John, Jacob and Jerimiah - NSC Accounting - Question 2 - 2024 - Paper 2
Step 1
2.1.1 Calculate the VAT amount on the goods sold by the business.
Answer
To calculate the VAT amount on the goods sold, we need to determine the total sales amount that is subject to VAT. From the information provided, the total sales amount is R839,800 which includes standard-rated and zero-rated sales.
The VAT amount can be calculated using the formula:
In this case, we have:
- Total Sales = R839,800
- Zero-rated sales = R182,000
- Thus, the standard-rated sales = Total Sales - Zero-rated sales = R839,800 - R182,000 = R657,800.
Now, we calculate the VAT:
Therefore, the total VAT amount on the goods sold by the business is:
- VAT Amount = R98,670.
Step 2
2.1.2 Calculate the amount payable to or receivable from SARS on 30 April 2024.
Answer
To calculate the amount payable or receivable from SARS, we will reference the VAT control calculation:
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Identify the amounts to include in the VAT calculation:
- VAT collected on sales (from Question 2.1.1): R98,670.
- VAT paid on purchases:
- Standard-rate products: R82,200.
- Zero-rated products: R0.
- Discounts and other adjustments: R31,510 written off.
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Incorporate the existing balance due to SARS:
- Opening Balance = R5,340.
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Totaling all these values yields:
- VAT Control = (R98,670 - R82,200 + R5,340 - R31,510)
- VAT Control = R14,550.
Thus, on 30 April 2024, the amount payable to or receivable from SARS is: R14,550.