Solar Inc. is registered for GCT/VAT, and it sells both standard rated and exempt supplies. The company is in the process of preparing its GCT return for August 2020. The following information relates to the period (all invoices are tax exclusive):
a. Sales invoices issued for standard-rated goods totaled $2,580,000. Invoices for exempted supplies sold totaled $360,850.
b. The company wrote off as bad debts $24,000 for a customer who had gone into liquidation.
c. Total purchases and expenses amounted to $850,500. This included $55,000 for accounting services, $65,000 for entertaining clients and $125,000 for construction materials used to repair the administrative offices at Solar Inc.
d. The company leases a truck for $80,000 per month for the transportation of equipment. The company also purchased a private motor car for use in the business at a cost US$25,000 (GCT exclusive). BOJ exchange rate $135.
e. In August 2020, the company employed the services of a foreign consultancy firm to upgrade its internal computer networks. The work was completed and the foreign company paid $600,000 for work done.

Required:
a. Calculate Solar Inc.’s GCT payable for the month August 2020. (10 marks)
b. List the information that should be shown on a GCT/VAT invoice. (2 marks)
c. Evaluate whether registration for GCT benefits businesses. (3 marks)

Answer rating: 100% (QA)

Answer Ans a Calculations of solar incs GCT payable for the month of august 2020 Standard rated good... View the full answer