Question One: (25 marks)

E K Kanoo is registered trader for VAT with NBR of Ministry of Finance of Bahrain. EKK is dealing with the supplies which are standard rated @5%. EKK is supposed to submit VAT returns on quarterly basis. Following are the transactions of 2020.

July 10	Purchased goods list price of BD 100,000 from Ahmed. Trade Discount 20%. Credit Term was 1/30, n/60. (3 Marks)
July 13	Returned goods list price of BD 10,000 to Ahmed. (3 Marks)
July 14	Purchased Stationery for BD 1000. (3 Marks)
July 16	Purchased zero rated items for BD 50,000. (2 Marks)
July 26	Sold goods list price of BD120,000 to Zahra. Trade discount was 10%. Credit Term was 1/30, n/60. (3 Marks)
August 8	Purchased goods list price of BD 20,000. Input Credit cannot be claimed on it as it was exempt item. Trade discount was 10%. (3 Marks)
August 29	Sold goods list price of BD 40,000 to Hamdan on cash. Trade Discount was 5%. (2 Marks)
December 31	Sold goods list price of BD 60,000 on credit to Reem. Trade Discount 10%. (2 Marks)

Assume that input credit claimed in books of account dated September 30, 2020 and VAT return is submitted on October 25, 2020 with VAT payment or refunded. (4 Marks)

Instructions:

Prepare the Journal entries for above transactions, date wise.

Working Notes:

VAT Claimed

VAT Payable to NBR