Brewmaster Inc. $($Pty$)$ Ltd $($hereafter$,$ Brewmaster Inc.$)$ is a leading craft beer brewery

that produces a wide range of beers for both the local and international markets. The

company is a registered VAT vendor and only transacts with other registered VAT

vendors. The VAT rate is $15\%.$ The financial year ends on $31$ December $2023.$

The extract trial balance for Brewmaster Inc. as at $30$ November $2023$ is as followsThe following are the transactions for December $2023.$ These transactions still

need to be recorded:

$1.$ Lucy Adams, the owner, invested an additional R$300000($excluding VAT$)$ into the

business for an expansion plan.

$2.$ Brewmaster Inc. finalised an order, selling $5000$ crates of beer to a distributor for

R$500000($including VAT$).$

$3.$ The company launched a limited$-$edition holiday brew, resulting in sales of

R$150000($including VAT$).$

$4.$ Brewmaster Inc. took out a loan of R$1500000$ from FirstBrew Bank at the

beginning of the month to expand into new international markets. This was at an

annual interest rate of $8\%.$ The first interest instalment is due on $31$ December

$2023\mathrm{.}5.$ Customers struggled to settle their accounts with Brewmaster Inc. primarily due to

local bars going out of business. Bad debts amounting to R$40000$ requires write

off.

$6.$ Brewmaster Inc. bought and paid new brewing equipment for R$600000($including

VAT$),$ expecting to increase production capacity by $25\%.$

$7.$ The company paid December salaries of R$55000$ to the marketing team for their

overtime efforts on the new launch.

$8.$ The annual company event, promoting team building, costs R$80000($including

VAT$).$

$9.$ The SARS VAT account balance of R$35000$ as of $1$ December $2023$ was fully paid

on $20$ December $2023.$

$10.$Lucy decided to invest in a new marketing campaign that cost R$120000($including

VAT$).$

$11.$The warehouse rent increased, adding an additional expense of R$25000$

$($excluding VAT$)$ for December. The warehouse owner is not a registered VAT

vendor.

$12.$Purchased brewing inventory ingredients from a registered VAT vendor amounting

to R$450000$ inclusive of VAT.

Additional information:

$$ Round off to the nearest Rand where applicable.REQUIRED:

$1\mathrm{.}1$ Prepare the Statement of Profit or Loss and Other Comprehensive Income, up

until Profit before tax line, for Brewmaster Inc. for the financial year ended $31$

December $2023.$

$(18$ marks$)$

$1\mathrm{.}2$ Prepare the SARS VAT general ledger account as at $31$ December $2023.$

$(11$ marks$)$

$1\mathrm{.}3$ Based on your answer calculated in question $1\mathrm{.}2$ explain in words if a payment

to$/$from SARS is payable$/$receivable as at $31$ December $2023.$ Include in your

explanation how this amount will be represented on the statement of financial

position of Brewmaster Inc. for the financial year ending $31$ December $2023.$

$(3$ marks