Mr. Anza Budah is the owner of Anzero Enterprises. The business specializes in buying and selling bottles
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Question:
Mr. Anza Budah is the owner of Anzero Enterprises. The business specializes in buying and selling bottles of Mphezu fruit juice – “Just Mphezu juice”. Anzero Enterprises accounts for inventory using perpetual inventory system on the Fist-In First-Out (FIFO) basis. The business is registered for VAT and VAT rate is 15%. Anzero Enterprises has a 31 December financial year end.
The following transactions took place during the financial year ended 2019.
- Trade inventories on hand on 1 January 2019 amount to R112 000.
- Credit purchases from suppliers during 2019 amount to R1 104 000 (VAT inclusive).
- Returns to suppliers during 2019 amount to R36 800 (VAT inclusive).
- Credit sales during 2019 amount to R1 642 200 (VAT inclusive) and cost of the sales is R816 000.
- Returns by customers during 2019 amount to R32 200 (VAT inclusive), with a cost of sales of R16 000.
- The system indicate that there should be R240 000 on hand on 31 December 2019.
- Trade inventories on hand on 31 December 2019, as determined through a physical inventories count, amount to R220 000
- REQUIRED:
Recognize the abovementioned transactions and events in the records (general journal) of Anzero Enterprises for the reporting period ended 31 December 2019.
- Show the following accounts in the general ledger of Anzero Enterprises for the reporting period ended 31 December 2019:
- Cost of sales
- VAT control account
Related Book For
Principles of Taxation for Business and Investment Planning 2017
ISBN: 9781259753015
20th edition
Authors: Sally M. Jones, Shelley C. Rhoades-Catanach, Sandra R. Callaghan
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