QUESTION TWO

On $14$ February $2024,$ a vendor bought a gaming laptop at a cost price of R$18000$ exclusive of VAT

and paid the wholesaler R$20700.$ On $27$ February $2024,$ the vendor sold the gaming laptop to a

customer for R$26450($inclusive of VAT$)$ cash. Assume that the periodic inventory method is in use

and that this was the only transaction in February $2024.$

Required:

$2\mathrm{.}1$ Show the journal entries to record the purchase and sale of the gaming laptop during

February $2024.$ Thereafter, record the entries for the payment of VAT to SARS on due date

$20$ March $2024$

$2\mathrm{.}2$ Describe the two valuation systems of inventory

$2\mathrm{.}2\mathrm{.}1$ Weighted Average Cost Method

$2\mathrm{.}2\mathrm{.}2$ FIFO method