Holly Manufactures produces school textbooks and supply to the local schools. They use a markup of 135% on cost price.

INFORMATION

A.	Balance: VAT control (debit)	5 800
B.	Summary of source documents
	Invoices received: VAT inclusive	56 850
	Invoices issued: VAT exclusive	23 580
	Cheque issued: VAT exclusive (non-payment to creditors)	145 900
	Debit notes issued: VAT amount	5 900
	Receipts issued: VAT inclusive (non-payment to debtors)	156 800
	Sales according to cash register roll: VAT amount	15 780
	Journal notes for drawings: VAT inclusive	1 590
	Credit notes issued: VAT inclusive	2 560
	Journal notes for bad debts: VAT amount	1 800
	Bank statement for bank charges: VAT inclusive	890
	Petty cash notes issued: VAT amount	1 090

 INSTRUCTIONS

You are the newly appointed bookkeeper at Holly Manufactures and your first task is to determine the VAT situation. VAT is calculated at 15%. The previous bookkeeper gave you all the source documents. The journals were not compiled, but the totals of all the source documents were provided. Do the following using the relevant source documents. Round of to the nearest integer (no decimals).

1. Calculate the VAT input on 31 January 2019. 
2. Calculate the VAT output on 31 January 2019. 
3. Calculate the amount owed to / receivable from SARS on 31 January 2019. 

Answer rating: 100% (QA)

To calculate the VAT input we need to determine the total VAT incurred on purchases during the perio... View the full answer