Sam Sandy, a resident of the Republic, sells and repairs watches from a shop she leases in a local shopping centre. She is a sole proprietor and is registered for value-added tax on the invoice basis. An analysis of the receipts and accruals and expenditure for her two-month tax period ending 30 September 2020 is set out below. Unless otherwise stated, all amounts are inclusive of value-added tax when applicable. She makes solely taxable supplies.
Receipts and accruals
Sales of watches 80 400
Repairs of watches 30 100
Interest 5 400
Expenditure
Bad debts (note 1) 15 400
Bank charges 970
Depreciation (note 2) 31 540
Insurance premiums (note 3) 2 415
Fuel 1 740
Printing and stationery 1 587
Purchases (note 4) 130 100
Salaries 54 740
Rentals (note 5) 15 870
Notes
1. Bad debts of R13 225 written off by Sam Sandy, comprising the following:
• R 8 700 owing by one of her long-standing customers, from a credit sale. This customer
has since emigrated and she has been unable to trace her.
• R 6 700 was lent by her to an employee, who left town without repaying the loan.
2. Depreciation (for the two-month tax period) is charged for the following assets owned by
Sam Sandy:
 Manufacturing equipment that was purchased by her in a previous tax
period for R276 000 (R240 000 plus value-added tax of R36 000)
R120 400
 A computer that was purchased by her on 1 August 2020 for R14 375 (R12
500 plus value-added tax of R1 875)
R9 700
3. Sam Sandy’s insurance premiums of R2 415 were incurred for the following assets that
belong to her:
Manufacturing equipment 460
Office computer 230
Trading stock 1 725
4. Sam Sandy’s purchases of R160 245 are made up as follows:
Purchases of raw materials from vendors 126 500
Second-hand watches purchased from vendors 17 250
Second-hand watches purchased (and paid for) from non-vendors 16 675
5. Sam Sandy’s rentals of R15 870 are for the following items:
Shop premises 11 400
Cash register 4 470
YOU ARE REQUIRED TO determine the value-added tax due to, or from, SARS for Sam Sandy’s twomonth
tax period that ended on 30 September 2020.
It is imperative that you use the updated VAT rates for the period under review.
Where applicable round off amount to the nearest Rand.

Answer rating: 100% (QA)

2 3 5 FUEL 6 10 ITEM BAD DEBTS BANK CHARGE VAT SARS 15 DEPRECIATION PRINTING 7 PURCHASES ... View the full answer