Beauty Pageant (Pty) Ltd sells slimming products to beauty salons and health spas. Ten months ago, a
Question:
Beauty Pageant (Pty) Ltd sells slimming products to beauty salons and health spas. Ten months ago, a newly appointed sales lady, employed to market a new range of fat burning products, disappeared along with a motor car (as defined) belonging to Beauty Pageant (Pty) Ltd and a boot full of fat burning products. All attempts to trace this sales lady have failed.
The insurance company finally decided to pay out R119 200, calculated as follows:
• R85 000 for the motor car and
• R34 200 for the fat burning products that were stolen.
These amounts comprise the full and final settlement of Beauty Pageant (Pty) Ltd’s claim in respect of the above.
1. Briefly discuss (with calculations where applicable) whether there are any VAT implications for Beauty Pageant (Pty) Ltd on the R119 200 payment received from the insurance company.
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I