The management of Maendeleo Ltd. a registered supplier of vatable goods presented the following information relating o
Question:
The management of Maendeleo Ltd. a registered supplier of vatable goods presented the following information relating o the company’s transactions for the six months ended 30 June 2019:
Month Purchases Sales
Sh. Sh.
January 1,500,000 2,200,000
February 1,800,000 2,700,000
March 1,700,000 2,000,000
April 1,500,000 900,000
May 400,000 600,000
June 2,000,000 2,600,000
The amounts stated above were inclusive of VAT at a rate of 16%.
Additional Information:
1. All purchases were made on a cash basis while all sales were on a credit basis. The cash due on credit sales was received in the month following the month of sale.
2. Ten percent of the purchases made by the company in the month of April were returned to the suppliers in the same month.
3. Included in the sales for the month of May was sh.200,000 for which the debtor defaulted and was subsequently declared bankrupt on 30 June 2019.
Required: Determine the VAT payable or refundable for each of the six months from January to June 2019.
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett