FACULTY OF ACCOUNTING AND INFORMATICS

DEPARTMENT OF AUDITING AND TAXATION

2021

YEAR END CONTINUOUS ASSESSMENT TEST ONE

INSTRUCTIONAL PROGRAMME : ND: Accounting, ND Cost & Management

Accounting, ND Internal Auditing, ND
Taxation, ND FIS, Dip Accounting,
Dip Internal Auditing
INSTRUCTIONAL OFFERING : TAXATION 2 MODULE 2 / Taxation 2B
PAPER NUMBER :
SUBJECT CODE/S : TAXN221 / TAXB201 / TAXT221 / TXAN221
DATE : 07 October 2021 (12h00) to
08 October 2021(12h00)
DURATION : 60 Minutes
EXAMINER : MRS. C RONALD
MODERATOR : MR. P K MABENA

INSTRUCTIONS/REQUIREMENTS:-
1. Answer all quiz questions.
2. Round off to nearest rand.
3. Arithmetic calculators are permitted.
4. It is an open book test.

Hints

· Read through the question carefully

· Work through the question manually
· Double check your work
· Then start the quiz
· Consult your workings and answer the questions
· The questions are randomized from a question bank. This means on multiple
attempts the questions made available will differ.
· The order of the questions will change with each attempt.
· The options for multiple choice questions, shuffle. This means the order of the
options change with each attempt.
· We wish you well with your studies.
Kaju (Pty) Ltd. is a fruit juice wholesaler, who has been trading from the KwaZulu Natal Midlands for
over five years.

Kaju (Pty) Ltd is a registered VAT vendor with an annual turnover of just under R 10 000 000.

The VAT clerk at Kaju (Pty) Ltd is in poor health. and the Chief Financial Officer has asked you her
good friend to assist her with the April 2021 VAT Return (04/2021)

The table and notes below is a summary of the relevant VAT transactions

Income Notes
Local Sales R 21 900 000
Export Sales R 470 000
Local Interest Earned R 21 300
Bad Debts Recovered
Madame Fruit 1 R 36 500
Muto Wemichero 1 R 19 900
Indemnity Awards
Motor Car 2 R 115 000
Trading Stock 2 R 2 600

Expenses
Trading Stock R 98 000
Salaries R 1 050 000
Fuel (Petrol and Diesel) R 150 000
Motor Car Repairs and Maintenance R 18 000
Purchase of a Panel Van 5 R 230 000
Insurance on Panel Van R 1 400
Country Club Subscription R 5 000
Beverages for Staff R 3 000
Printing and stationery R 6 000
Landline Telephone R 2 100
Bad Debts
Pazhacharu 6 R 8 000
Fruchtsaft Germany 6 R 30 000
Interest on Bank Overdraft R 12 000
Bank Charges R 22 000
Salespeople Travel Expenses
Local Meals (when entertaining customers) R 13 000
Meals when spending a night or more away from home R 4 500
Flights within the Republic (South African Destination) R 17 000
Flights outside the Republic (Foreign Destination) R 75 000
Notes

1) Two debts have been written off in previous tax periods, were recovered by Kaju (Pty) Ltd during
the current tax period. Madam Fruit is a South African resident business. Muto Wemichero is a
Zimbabwean based business.
2) In February 2021, the company’s motor car was stolen from a customer’s premises. The
company also lost a small portion of trading stock that was in the stolen vehicle. Sumo de Fruta,
the company’s salesperson used the motor car exclusively.
3) During December 2020, one of the company’s customers accidentally overpaid them. The
customer was to have paid R 2 300 per the tax invoice, but paid R 3 200. The R 900
overpayment was not refunded to the customer.
4) During March 2020, the company purchased R 34 500 worth of trading stock from a supplier.
The tax invoice was duly received and the necessary VAT input was claimed in the April 2020 VAT
Return. Your reconciliation of the VAT Accounts revealed that only R 23 000 of the R 34 500 was
paid.
5) The company purchased a new panel van on 1 March 2021 to replace the motor car that was
stolen. SARS is satisfied that the panel van is not a motor car as defined. This vehicle will be used
exclusively by Sumo de Fruta and the full running cost will be borne by Kaju (Pty) Ltd. Sumo de
Fruta gained the right to use the panel van on 1 March 2021.
6) Pazhacharu is a South African based business. Fruchtsaft Germany is a company that operates
out Bavaria, Germany.

You are required to:

Calculate the VAT payable or refundable by Kaju (Pty) Ltd.for the tax period April 2021 and answer
the quiz questions.