SOLUTION TO QUESTION 1 May/June 2014
MONATE BAKERS
VAT Payable/refundable 28 February 2015 (2 month period)
Part A
VAT Output
Accountant's Total Output VAT (given) 93 600
Cash sales - reversal of accountant's output vat -56 123
cash sales were exclusive of VAT therefore you need -
to apply 15% and not 15/115 -
R457 000 x 15% 68 550
Interest on loan - reversal of accountant's output vat -198
- interest is a financial service and therefore exempt -
Indemnity payments - reversal of accountant's output vat -21 000
time of supply is date payment is received
payment was received after 28/02/2015 and
therefore falls outside of the VAT period -
Fringe benefit
reversal of accountant's output vat -16 279
Correct calc (R96 900 x 100/115 x 0,6% x 15/115 x 2 months) 132
Adjusted Output VAT 68 682
VAT Input
Accountant's Total Input VAT (given) 51 811
Baking ingredients – no adjustment -
Baking ovens - reversal of accountant's input vat -5 250
- Notional input VAT lower of cost R37 500 or MV R33 000
33000 x 15/115 4 304
Donation - reversal of accountant's input vat -1 070
- no input vat, as there is no consideration -
Salaries - reversal of accountant's input vat -19 600
- not a supply -
Municipal rates - reversal of accountant's input vat -360
- zero-rated supply -
Depreciation - reversal of accountant's input vat -2 151
- not a supply
Adjusted Input VAT 27 684
Vat Refund (Vat output less Vat input) 40 998
MONATE BAKERS
VAT Payable/refundable 28 February 2015 (2 month period)
Part A
VAT Output
Accountant's Total Output VAT (given) 93 600
Cash sales - reversal of accountant's output vat -56 123
cash sales were exclusive of VAT therefore you need -
to apply 15% and not 15/115 -
R457 000 x 15% 68 550
Interest on loan - reversal of accountant's output vat -198
- interest is a financial service and therefore exempt -
Indemnity payments - reversal of accountant's output vat -21 000
time of supply is date payment is received
payment was received after 28/02/2015 and
therefore falls outside of the VAT period -
Fringe benefit
reversal of accountant's output vat -16 279
Correct calc (R96 900 x 100/115 x 0,6% x 15/115 x 2 months) 132
Adjusted Output VAT 68 682
VAT Input
Accountant's Total Input VAT (given) 51 811
Baking ingredients – no adjustment -
Baking ovens - reversal of accountant's input vat -5 250
- Notional input VAT lower of cost R37 500 or MV R33 000
33000 x 15/115 4 304
Donation - reversal of accountant's input vat -1 070
- no input vat, as there is no consideration -
Salaries - reversal of accountant's input vat -19 600
- not a supply -
Municipal rates - reversal of accountant's input vat -360
- zero-rated supply -
Depreciation - reversal of accountant's input vat -2 151
- not a supply
Adjusted Input VAT 27 684
Vat Refund (Vat output less Vat input) 40 998