Exam (elaborations)
TAX3701 EXAM PACK 2024/2025
- Institution
- University Of South Africa (Unisa)
TAX3701 EXAM PACK 2024/2025 QUESTIONS AND ANSWERS
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lOMoAR cPSD| 24668432TAX3701 EXAM
PACK
2024/2025
[Company address]
,QUESTION 1 (25 marks, 45 minutes)
Fast Move Courier (Pty) Ltd (FMC) is a courier company with its head office in
Johannesburg, South Africa, and courier depots in all the major cities in South Africa. FMC
provides courier services in South Africa, Namibia, and Botswana. FMC is a registered VAT
vendor, and its twomonth VAT period ends on 29 February 2024. The following is a
summary of the VAT transactions for the two-month VAT period that ended on 29 February
2024 (all amounts include VAT at 15% unless specified otherwise):
Cash receipts Note R
Courier services provided in South Africa 3 240 000
Courier services provided in Namibia and Botswana 360 000
Interest received on outstanding debtors’ accounts 1 759
Insurance payment received 1 258 750
Cash payments and expenses
Bank charges 10 235
Entertainment expenses as defined 4 025
Fuel and diesel 357 850
Insurance premiums for premises and delivery vehicles 80 500
Motor vehicle purchased 2 373 750
Delivery vehicle purchased 1 281 750
Microwave oven purchased for the staff canteen 1 8 625
Rent paid for head office and depot premises 172 500
Advertising and marketing 3 70 725
Legal fees 4 2 070
Purchase of a property 5 1 750 000
,Notes
1. Insurance payment received
FMC received an insurance claim payment from its insurance company on 18 February 2024
for an amount of R258 750. The payment received was for the following claims:
• R252 500 for a delivery vehicle that was damaged beyond repair in an accident in
Cape Town, South Africa. FMC used the insurance payment to purchase a new
delivery vehicle on 21 February 2024 for an amount of R281 750.
• R6 250 for a microwave oven used in the staff canteen that was damaged during a
loadshedding surge in the electricity supply to the canteen. A new microwave oven
was purchased on 23 February 2024 for an amount of R8 625.
2. Motor vehicle purchased
FMC purchased a new double cab bakkie for an amount of R373 750 on 2 January 2024 for
the sole use of the marketing manager to visit new clients. The marketing manager had full
use of the new double cab bakkie from 2 January 2024, and FMC pays for all the running
costs of the bakkie.
QUESTION 1 (continued)
3. Advertising and marketing
FMC embarked on an aggressive advertising and marketing campaign by rebranding all the
vehicles in its courier fleet. The R70 725 was paid on 15 January 2024 to Branding
Specialists (Pty) Ltd.
, 4. Legal fees
FMC paid R2 070 in legal fees to JET Attorneys on 19 February 2024 for legal fees relating
to a private matter involving one of the employees of FMC.
5. Purchase of a property
FMC purchased a second-hand property from a non-vendor on 31 January 2024 for an
amount of R1 750 000, which was fully paid on 17 February 2024 to the seller. FMC also
paid an amount of R26 625 in transfer duty on 31 January 2024, which is not included in the
purchase price.
REQUIRED: MARKS
Calculate the VAT payable by or refundable to Fast Move Courier (Pty) Ltd
for the two-month VAT period ended on 29 February 2024. Please provide a 25
reason if an amount is not subject to output tax or when an input tax cannot
be claimed.
To calculate the VAT payable or refundable for Fast Move Courier (Pty) Ltd (FMC) for
the two-month VAT period ended on 29 February 2024, we need to determine the output
VAT and the input VAT.
Output VAT Calculation
1. Courier services provided in South Africa:
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