Tutorial 3 (Solution – 85 Marks)

J1.1
Dr Cr
1 Jan 2023
R R
Vehicles (SFP) 102 600 ✓
Bank (SFP) 102 600 ✓
Recognise passenger vehicle bought for
cash
J1.2
Dr Cr
1 Jan 2023
R R
Vehicles (SFP) (R92 000 x 100 / 115) 80 000 ✓
VAT input (SFP) (R92 000 x 15 / 115) 12 000 ✓
Bank (SFP) 92 000 ✓
Recognise delivery vehicle bought for cash
from a VAT vendor
J1.3
Dr Cr
1 May 2023
R R
Vehicles (SFP) 119 700 ✓
Bank (SFP) 119 700 ✓
Recognise delivery vehicle bought for cash
from a non-VAT vendor
J1.4
Dr Cr
31 Dec 2023
R R
Depreciation (P/L) 57 610 3c
Accumulated depreciation: Vehicles
57 610 ✓
(SFP)
Recognise the depreciation for vehicles for
the year

Passenger vehicle 102 600 / 4 25 650 ✓

Delivery vehicle 80 000 / 5 16 000 ✓
Delivery vehicle 119 700 x 8 / 12 / 5 15 960 ✓
Total 57 610
J2.1
Dr Cr
1 Jan 2023
R R
Machinery (SFP) (R172 500 x 100 / 115) 150 000 ✓
VAT input (SFP) (R172 500 x 15 / 115) 22 500 ✓
Suppliers loan (SFP) 172 500 ✓
Recognise machinery bought and the
accompanying liability
J2.2

Dr Cr
31 Dec 2023
R R
Depreciation (P/L) (150 000 / 5) 30 000 ✓
Accumulated depreciation: Machinery
30 000 ✓
(SFP)
Recognise the depreciation for machinery
for the year
J2.3
Dr Cr
30 June 2023 R R
Interest expense (P/L) 6 900 ✓
Suppliers loan (SFP) 6 900 ✓
Recognise interest expense capitalised
semi-annually
J2.4
Dr Cr
31 Dec 2023
R R
Interest expense (P/L) 7 176 ✓
Suppliers loan (SFP) 7 176 ✓
Recognise interest expense capitalised
semi-annually

Interest per year Amortised cost of the

8% loan
01-Jan-16 Primary debt 172 500
30-Jun-16 Interest 6 900 179 400
31-Dec-16 Interest 7 179 186 576
J3.1
Dr Cr
1 April 2023
R R
Trade inventories (SFP)
57 000 ✓
(65 550 x 100 / 115)
VAT input (SFP)
8 550 ✓
(65 550 x 15 / 115)
Payable: Clean Carpets (SFP) 65 550 ✓
Recognise trade inventories purchased and
the accompanying liability
J3.2
Dr Cr
30 April 2023
R R
Payable: Clean Carpets (SFP) 65 550 ✓
Bank (SFP) 65 550 ✓
Derecognise payable due to payment
J4.1

Dr Cr
28 Feb 2023
R R
Bank (SFP) 27 360 ✓
Sales (P/L) (R27 360 x 100 / 115) 23 791 ✓
VAT output (SFP) (R27 360 x 15 / 115) 3 569 ✓
Recognise cash sales of trade inventories
J4.2
Dr Cr
28 Feb 2023
R R
Cost of sales (P/L) 12 000 ✓
Trade inventories (SFP) 12 000 ✓
Recognise cost of trade inventories sold
J4.3
Dr Cr
1 Mar 2023
R R
Receivable: Simon (SFP) 34 200 ✓
Sales (P/L) (R34 200 x 100 / 115) 29 739 ✓
VAT output (SFP) (R34 200 x 15 / 115) 4 461 ✓
Recognise credit sales of trade inventories
and the accompanying liability
J4.4
Dr Cr
1 Mar 2023
R R
Cost of sales (P/L) 15 000 ✓
Trade inventories (SFP) 15 000 ✓
Recognise cost of trade inventories sold
J5.1
Dr Cr
30 June 2023
R R
Bad debts (P/L) (R34 200 x 100 / 115) 29 739 ✓
VAT input (SFP) (R34 200 x 15 / 115) 4 461 ✓
Receivable: Simon (SFP) 34 200 ✓
Deregognise Receivable Simon as per
authorization from owner
J5.2
Dr Cr
1 Dec 2023
R R
Bank (SFP) 11 500 ✓
Bad debts (P/L) (R11 500 x 100 / 115) 10 000 ✓
VAT output (SFP) (R11 500 x 15 / 115) 1 500 ✓
 Recognise liquidation dividend in respect of
Receivable Simon previously written off

J6.1
Dr Cr
1 Mar 2023
R R
Rent deposit (SFP) 8 000 ✓
Bank (SFP) 8 000 ✓
Recognise rent deposit paid
J6.2
Dr Cr
28 Dec 2023
R R
Rent expense (P/L) (R8 000 x 100 / 115) 6 957 ✓
VAT input (SFP) (R8 000 x 15 / 115) 1 043 ✓
Bank (SFP) 8 000 ✓
Recognise rent expense paid in December

J7.1
Dr Cr
7 Dec 2023
R R
Payable: Medical aid (SFP) 8 000 ✓
Payable: SARS (SFP) 8 000 ✓
Bank (SFP) 16 000 ✓
Derecognise salary creditor with settlement
J7.2
Dr Cr
31 Dec 2023
R R
Employee benefit expense (P/L)
128 000 ✓
(120 000 + 8 000)
Payable: Medical aid (SFP) 8 000 ✓
Payable: SARS (SFP) 8 000 ✓
Bank (SFP) (120 000 + 8 000 – 8 000 –
112 000 ✓
8 000)
Recognise payroll for December 2017
J9.1
Dr Cr
1 July 2023
R R
VAT input (SFP) (15 960 x 15 / 115) 2 082 ✓
Insurance expense (P/L) 2 082 ✓
Correction of VAT input not accounted for

J9.2
 Dr Cr
31 Dec 2023
R R
Insurance prepaid (SFP) ((15 960 – 2
6 939 2c
082)✓ x 6 / 12✓)
Insurance expense (P/L) 6 939 ✓
Recognise prepaid insurance on 31
December as an asset by reclassifying a
portion of the expense as an asset
J10.1
Dr Cr
1 Jan 2023
R R
Office stationery (P/L) (5 415 x 100 / 115) 4 709 ✓
VAT input (SFP) (5 415 x 15 / 115) 706 ✓
Bank (SFP) 5 415 ✓
Recognise stationery bought on cash
J10.2
Dr Cr
1 Jan 2023
R R
Office stationery (P/L) 4 560 ✓
Capital (SCE) 4 560 ✓
Recognise capital contribution of office
stationery
J10.3
Dr Cr
31 Dec 2023
R R
Office stationary on hand (SFP) 500 ✓
Office stationery (P/L) 500 ✓
Recognise stationery on hand on 31 Dec
2023 by reclassifying a part of the expense
as an asset
J11.1
Dr Cr
1 April 2023
R R
Donations (P/L) 1 000 ✓
Bank (SFP) 1 000 ✓
Recognise donation of cash to primary
school
J11.2
Dr Cr
1 April 2023
R R
Donations (P/L) 690 ✓
Trade inventories (SFP)
600 ✓
(690 x 100 / 115)
VAT output (SFP) (684 x 15 / 115) 90 ✓
 Recognise donation of Trade Inventory to
primary school

J12.1
Dr Cr
24 Dec 2023
R R
410 000
VAT output (SFP) ✓
220 800
VAT input (SFP) ✓
VAT payment control (SFP) 181 200 ✓
Recognise the closing-off of VAT output and
VAT input, as it appears on the November
VAT return against the VAT payment control
account
J12.1
Dr Cr
24 Dec 2023
R R
VAT payment control (SFP) 181 200 ✓
Bank (SFP) 181 200 ✓
Recognise the settlement of the VAT owing
according to the November VAT return