Mr Bradley Cooper, a resident of the Republic, sells and repairs watches from a shop he leases in a local shopping centre. He is a sole proprietor and is registered for value-added tax on the invoice basis.
An analysis of Bradley Cooper’s receipts, accruals and expenditure for his two-month tax period ended 30 September 2021 is set out below.

Unless stated otherwise, all amounts are inclusive of value-added tax when applicable. He makes taxable supplies only.
Receipts and accruals R299 825
Sales of watches R207 000
Income: Repair of watches R29 900
Interest received R5 175
Indemnity award (note 1) R57 750

Expenditure R713 268
Bad debts (note 2) R13 225
Motor car purchased R200 000
Bank charges R920
Manufacturing equipment (note 3) R276 000
Insurance premiums (note 4) R3 450
Fuel R2 990
Printing and stationery R1 564
Purchases (note 5) R160 425
Salaries R41 400
Rentals (note 6) R13 294

Notes
1. The indemnity award of R51 750 was received by Bradley Cooper from his insurer for two expensive watches that were stolen from his shop in June 2021.
2. Bad debts of R13 225 were written off by Bradley Cooper, comprising the following:
• R10 350 owed by one of his long-standing customers for a credit sale. This customer has since emigrated and he has been unable to trace her.
• R2 875 lent to an employee who has since left town without repaying the loan.
3. Bradley Cooper purchased manufacturing equipment in a previous tax period for R276 000 (R240 000 plus value-added tax of R36 000). The input tax was claimed previously.
4. Bradley Cooper’s insurance premiums of R3 450 were incurred on the following assets:
• Manufacturing equipment, R460
• Office computer, R230
• Motor car, R1 035
• Trading stock, R1 725
5. Bradley Cooper’s purchases of R160 425 are made up as follows:
• Purchases of raw materials from vendors, R126 500
• Second-hand watches purchased from vendors, R17 250

• Second-hand watches purchased (and paid for) from non-vendors, R16 675
Additional information:
Bradley Cooper purchases second-hand watches from both vendors (for example auctioneers) and non-vendors (for example private individuals and deceased estates). He displays and sells second-hand watches in his shop.
6. Bradley Cooper’s rentals of R13 294 are for the following items:
• Shop premises, R10 925
• Cash register, R1 495
• Urn (located in the shop for his employees to make coffee and tea), R874

Required:
1. Determine Bradley Cooper’s output tax for his two-month tax period that ended 30 September 2021. (5)
2. Determine Bradley Cooper’s input tax for his two-month tax period that ended 30 September 2021. (18)
3. Determine Bradley Cooper’s value-added tax due to or from SARS for his two-month tax period that ended on 30 September 2021.

Answer rating: 100% (QA)

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