Toy Story Ltd carries on business as a manufacturer of toys from its main branch in the
Question:
Toy Story Ltd carries on business as a manufacturer of toys from its main branch in the Republic. The company also
operates a depot in Botswana, where sales are made to customers living in Botswana. The Botswanan depot does not
operate as an independent branch. Toy Story Ltd has been registered as a Category ‘A’ vendor. All amounts include VAT
where appropriate.
The following information is provided:
Receipts:
1. Cash sales made by the Republic branch to South African customers
February: R199 300
March: R182 200
Cash sales made by the Botswanan depot to Botswanan customers (these goods were forwarded to the depot on 10 January and were all sold by the end of March)
February: R45 400
March: R56 800
2. Insurance payment received on an insurance claim for trading stock stolen in the Republic
February: R176 500
3. Interest received on a loan to a subsidiary company in the Republic
February: R19 180
4. Cash received for the sale of an old machine to Mr. Bell, the majority shareholder. Mr. Bell is not a registered vendor. The machine originally cost R20 000 and had a book value of R5 000 on the date of sale. The open market value on the date of sale was R23 480.
February: R16 900
Expenses:
1. Wages and salaries
February: R69 340
March: R62 500
2. Property rates on the business property
February: R 7 210
March: R7 210
3. Electricity and water
February: R6 583
March: R6 355
4. Telephone
February: R6 412
March: R6 070
5. Raw materials purchased from other vendors
February: R142 300
March: R96 700
6. Cost of entertaining important customers at various restaurants in Durban
February: R6 868
March: R6 412
7. Purchase of a new single-cab bakkie for use as a delivery vehicle
Cost in February: R176 500
Finance charges paid: R14 050
8. Cash cost of a new motor car purchased for general use within the business
February: R96 700
9. Petrol for delivery vehicles and the new motor car
February: R6 412
March: R6 526
10. Maintenance of delivery vehicle and the new motor car
February: R6 298
March: R6 412
11. Toy Story purchased three water bottles for the cold water-dispensing machine in the staff canteen. These bottles cost R2 000 each and were paid
for in March.
February: 11 500
Required:
Calculate the VAT payable by or refundable to Toy Story Ltd in respect of its two-month tax period ended 31 March 2021.
Expert Answer:
As VAT in Canada is 5 we will multiply sales by 105 in order to calculate their sale price Cash sales made by the Republic branch to South African cus... View the full answer
