Cool$-$lee $($Pty$)$ Ltd$,$ a vendor registered for VAT on the invoice basis, derives its income from

distributing and cold drinks to Supermarkets. The company rents several warehouses all

over South Africa. Cool$-$lee $($Pty$)$ Ltd also receives rental income from residential

accommodation provided to tenants in a block of flats.

The following information is in respect of Cool$-$Lee $($Pty$)$ Ltd$$s tax period $($a two month

period$)$ ended $30$ June and all amounts include VAT, where applicable.

Income Note R

Income from selling cool drink in South Africa $2500000$

Income from selling cool drink in Botswana $($direct exports$)800000$

Income from tenants for residential accommodation $600000$

Indemnity award received $1400000$

Sale of going concern $22000000$

Expenses

Cool drink purchased $900000$

Purchase of office furniture $($second$-$hand from a non$-$vendor$)($cash$)120000$

Purchase of double$-$cab bakkie $3280000$

Rent paid for warehouses $250000$

Water and electricity $4138000$

Bad debts $$ residential accommodation $6400$

Credit note issued to liquor store $4000$

Bank charges $400$

Interest paid on overdraft bank account $23000$

Notes:

$1.$ The indemnity award was received from an insurance claim for trading stock stolen in

transit to a customer.

$2.$ COOL$-$LEE $($Pty$)$ Ltd sold a factory as a going concern to a registered vendor. All legal

requirements were met for the sale to be the sale of a going concern.

$7$

$3.$ The sales representative uses this vehicle for both business and private use since $1$ June

and he bears the full cost of repairs and maintenance.

$4.$ Water and electricity paid constitute the following:

R

Warehouses $18000$

Offices $12000$

Residential accommodation $108000$

Total $138000$

Required:

$3\mathrm{.}1$ Calculate the input tax ratio for Cool$-$Lee $($Pty$)$ Ltd$.(3)$

$3\mathrm{.}2$ Based on the information above, calculate the net VAT payable for the

two$-$month period ending $30$ June $2023.$ Assume an input tax ratio of $80\%$

where applicable.

$(22)$