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Summary TAX3701 ASSIGNMENT 1 & 2 FOR SEMESTER 2: 2020
- Institution
- University Of South Africa (Unisa)
TAX3701 ASSIGNMENT 1 AND 2 FOR SEMESTER 2:2020
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TAX 3TOASS j9ents
(-)
Senas
Semos ke 2 202
, TAX3701/101
31
SECOND SEMESTER
ASSIGNMENT 1 (30marks,54 minutes)
MODULE DUE DATE UNIQUE NUMBER
TAX3701 21 AUGUST 2020 706010
ASSESSMENT CRITERIA FOR THIS ASSIGNMENT
For this assignment, you will need to have achieved the learning objectives set out in study units 1
to 4 as contained in Tutorial Letter 102/3/2020. This assignment will assess your ability to select the
alternative that best reflects the quantitative/qualitative solution to a problem. This assignment will
cOunt a maximum of 5% towards your final mark.
REQUIRED: MARKS
Select the option ((1)- (4)) that represents the correct answerto the question.
(The mark-reading sheet has 5 options; please ignore option 5 for each question in this 30
assignment.)
ASSIGNMENT 1: SEMESTER 2
Shine Jewellers Pty (Ltd) (Shine) is a South African jewellery company that imports jewellery from over-
seas to resell locally. Shine is registered for value-added tax (VAT) on the invoice basis and it has a two-
month tax period. The following amounts relate to receipts and payments for the two-month tax period
ending 29 February 2020.
Where applicable, all amounts arenclusive of VATdnless otherwise stated.
Receipts Notes R
Cash sales 280 000
Credit sales 653 600
Loan from AB Bank 250 000
Equity contributions from shareholders 320 000
Indemnity payment 135 000
Payments
Importation of stock 328 500
Purchase of a building 4 625 000
Sundry payments 24 700
Notes:
1. Shine has stores throughout the country. During January 2020, the company opened two new
stores, one in Johannesburg and another one in Durban. In order to finance the expansion, the
company acquired a loan of R250 000 from AB Bank and received equity contributions of R320 000
from the company's shareholders.
, 32
ASSIGNMENT 1: SEMESTER 2 (continued)
2 On 6 January 2020, a fire broke out at the Johannesburg branch and stock valued at R188 000 was
destroyed. The insurance company indemnified the company with a cash payment of R135 000.
3. On 28 December 2019, Shine imported a rare piece of jewellery from Germany. The cost price and
value for customs duty purposes was R328 500. Import surcharges of R6 250 were levied. The
date reflected on the customs bill of entry is 4
January
2020.
A. Shine purchased a second-hand building from a non-vendor for a consideration equal to R625 000.
The property was paid for in full on 25 January 2020 and was registered on 16 February 2020. The
open-market value at the date of registration was R680 000.
5. Sundry payments comprise of the following amounts exclusive of VAT:
R
Fuel cost 10 500
Bank charges 3 400
Salaries 8 000
Insurance premium 2 300
Coffee and tea for staff members
500
24700
Now answer questions 1 to 15 of Assignment 1 based on the information provided above for Shine
Jewellers (Pty) Ltd's two-month tax period ended 29 February 2020. Round off all your calculations to the
nearest rand.
QUESTIONN1
What is the output VAT on the credit sales2.
R17 609
R85 252
GS3 600 x S/s BS 2s2.
(3) R98 040
(4) R102 861
QUESTIONN2
What is the output VAT on the loan from AB Bank?
Rnil the loan is an exempt supply.
R30 702
(3) R32 609 ncneua Sewice npt S
(4) R37 500
QUESTION 3
Which one of the following statements is correct?
(1) Equity contributions will attract output VAT of R48 000.
(2) Equity contributions will not attract output VAT, as they will be
Equity contributions will not attract output VAT, as exempt.
they are zero-rated.
Equity contributions will not attract output VAT, as there is no
supply of goods or services
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