Question

Question 7.2
Record the following transactions in the general ledger of Dianco Stores. They use the periodic system to record inventory. VAT rate is 15%. Calculate towards the nearest rand.

Transactions for January 20.23:
1 Purchased inventory on credit from AB Suppliers Ltd, R2 645.
8 Sold inventory to JB Jones on credit, R3 174.
12 Paid wages, R3 800.
15 Purchased stationery and paid per EFT, R1 104.
20 Sold inventory for cash, R5 520.
31 Paid the amount owing to SARS for VAT for the month.

Answer 1

General Ledger for Dianco Stores:

Date Description Debit Credit
---------------------------------------------------------
Jan 20 Inventory 2 645
Accounts Payable 2 645

Jan 8 Accounts Receivable 3 174
Sales 2 760
VAT Input 414

Jan 12 Wage Expense 3 800
Cash 3 800

Jan 15 Stationery Expense 1 104
Cash 1 104

Jan 20 Cash 5 520
Sales 4 800
VAT Output 720

Jan 31 VAT Output 1 134
Accounts Payable 1 134

(VAT Output amount calculated as 15% of total sales for the month)