Solution to the Assessment Learning unit 6

BIG BUILDERS

(a) SALES JOURNAL – DECEMBER 2017 SJ01

Doc Day Details Fol VAT output Sales Debtors

no
R R R
173 3 White Birdie 1 610 (B) 11 500 (A) 13 110
174 11 Brown Eagle 532 (D) 3 800 (C) 4 332

Calculations:
(A) R13 110 x 100/114 = R11 500 or R13 110 - R1 610 = R11 500

(B) R13 110 - R11 500 = R1 610 or R13 110 x 14/114 = R1 610

(C) R4 332 x 100/114 = R3 800 or R4 332 - R532 = R3 800

(D) R4 332 - R3 800 = R532 or R4 332 x 14/114 = R532

E-tutor’s Notes

 Ensure that you include all the columns as instructed in the required part of the question;
 Note that sales invoices numbers are issues sequentially;
 We are told in the question that the transactions are already inclusive of 14% VAT, meanin g the figures are at 114%;
 Figure in the sales column should exclude VAT. Therefore, you should ensure they are at (114%-14% VAT) =100%
 Remember VAT output amount is payable to SARS, is not our money hence we want to account for it separately from our Sales amount;
 Debtors figures should be inclusive of VAT, should be at 114%
 Remember to cross-mark your calculations;
BIG BUILDERS

(b) PURCHASES JOURNAL – DECEMBER 2017 PJ01

Doc no Day Details Fol VAT input Purchases Creditors

R R R
AD 25 3 Lion Ltd 1 078 (F) 7 700 (E) 8 778
352 18 Penquin Ltd 3 500 (H) 25 000 (G) 28 500

Calculations
(E) R8 778 x 100/114 = R7 700 or R8 778 - R1 078 = R7 700

(F) R8 778 - R7 700 = R1 078 or R8 778 x 14/114 = R1 078

(G) R28 500 x 100/114 = R25 000 or R28 500 - R3 500 = R25 000

(H) R28 500 - R25 000 = R3 500 or R28 500 x 14/114 = R3 500

E-tutor’s Notes

 The purchases invoices numbers will not be in sequential order because they are issued by different suppliers that we buy from.
 The amount for “purchases” is at 100% and “Creditors” is at 114%
BIG BUILDERS

(c) SALES RETURNS JOURNAL – DECEMBER 2017 SRJ01

Doc no Day Details Fol VAT output Sales returns Debtors

R R R
CN 122 12 White Birdie 28 (J) 200 (I) 228
CN 123 23 Brown Eagle 42 (L) 300 (K) 342

Calculations

(I) R228 x 100/114 = R200 or R228 - R28 = R200

(J) R228 - R200 = R28 or R228 x 14/114 = R28

(K) R342 x 100/114 = R300 or R342 x100/114 = R300

(L) R342 - R300 = R42 or R342 x 14/114 = R42

E-tutor’s Notes

 Credit Notes should be issued in sequential order.

 Remember sales returns will reduces the “Debtors” account.
 Like in the Sales journal, Debtors figure should be inclusive of VAT, should be at 114%
 Remember VAT output amount is payable to SARS, is not our money hence we want to account for it separately from our Sales returns amount
BIG BUILDERS

(d) PURCHASES RETURNS JOURNAL – DECEMBER 2017 PRJ01

Doc no Day Details Fol VAT input Purchases Creditors

returns
R R R R R
CN 97 20 Penquin Ltd 210 1 500 1 710

R1 710 x 100/114 = R1 500 R1 710 - R1 500 = R210 or

R1 710 x 14/114 = R210 R1 710 - R210 = R1 500

E-tutor’s Notes

 Remember purchases returns will reduces the “Creditors” account.

 Remember to adjust VAT input account – this will reduce/credit VAT input account.