Scribd
Upload
5K views

Problem 1: Additional Information

ABC Corporation had gross sales of $8 million in March with $400,000 in sales returns. They also had goods shipped on consignment totaling $90,000. Their purchases for the month included $600,000 for goods, $75,000 for supplies, and $1.1 million for capital goods. Their input VAT was $84,770 and output VAT was $883,886, resulting in VAT payable of $799,116. Bobs Bookstore had total sales of $3.6 million in October from books, school supplies, and gifts. Their purchases included $1.344 million for supplies and gifts and $600,000 for books. Their input VAT was $176

Uploaded by

Angela Ricaplaza Reveral
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
5K views

Problem 1: Additional Information

ABC Corporation had gross sales of $8 million in March with $400,000 in sales returns. They also had goods shipped on consignment totaling $90,000. Their purchases for the month included $600,000 for goods, $75,000 for supplies, and $1.1 million for capital goods. Their input VAT was $84,770 and output VAT was $883,886, resulting in VAT payable of $799,116. Bobs Bookstore had total sales of $3.6 million in October from books, school supplies, and gifts. Their purchases included $1.344 million for supplies and gifts and $600,000 for books. Their input VAT was $176

Uploaded by

Angela Ricaplaza Reveral
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

PROBLEM 1

ABC Corporation (VAT-registered) has the following data for the month of March:

Gross Sales (VAT inclusive) 8,000,000


Sales returns 400,000

Goods shipped on consignment (net)


UNITS UNITS PRICE
Mar-25 40 10,000
Feb-14 30 10,000
Jan-08 20 10,000

Good withdrawn for use by the Company 50,000


Goods taken as payment to creditor 30,000
Purchases for the month (net of VAT):
Goods 600,000
Supplies 75,000
Capital Goods (Useful life- 4 years) 1,100,000
Freight and insurance 8,500
Salaries of employees 385,000

Additional Information:

a) Received cash representing payment for ten (10) units delivered on February
14. The amount received was net of 10% commission
b) A consigned reported and remitted 200,000 (gross of 10% commission)
representing 20 units sold from goods consigned in March

Required:
Determine the VAT Payable for the month of March.

Net Sales (8,000,000-400,000)/ 1.12 ×12% = 814,286


Sales from March and February Consignment
= 36,000
10,000 (20 + 10) ×12%
Transactions deemed Sales January 8
= 24,000
Consignment (20 × 10,000) ×12%
Goods withdrawn for use by the company (50,000
= 6,000
× 12%)
Goods taken as payment to creditor
= 3,600
(30,000 × 12%)
TOTAL OUTPUT VAT 883,886
Less:
Input VAT Purchased of goods (600,000 ×
= 72,000
12%)
Purchase of Supplies (75,000 × 12%) = 9,000
Capital Goods (1,100,000 × 12%/48 mons.) = 2,750
Purchase of freight and Insurance (8,500 × 12%) = 1,020
TOTAL INPUT VAT 84,770

VAT PAYABLE 799,116


PROBLEM 2
Bobs Bookstore (VAT registered) is engaged in the business of selling books, school
supplies and gift items. The following were provided to you during the month of October
(inclusive of VAT if applicable):

Sale of school supplies 1,680,000


Sale of Books 1,200,000
Sale of gift items 1,008,000
Purchase of school supplies and gift items for sale 1,344,000
Purchase of books 600,000
Purchase of computers used in vatable and non-vatable transactions 448,000
Purchase of office supplies used in vatable and non-vatable transactions from non 200,000
VAT registered suppliers

Required:
Determine the VAT Payable for the month of October.

Sale of school supplies P 1,680,000


Sale of gift items 1,008,000
Sale subjected to output tax P 2,688,000

OUTPUT VAT (2,688,000/1.12 × 12%) 288,000

Less:
Input VAT on Purchase of school supplies and
gift items for sale (1,344,000/ 1.12 × 12%) 144,000

Input VAT on Purchase of computers (488,000/


32,000
1.12 × 12%) × (2,400,000/ 3,600,000)
INPUT VAT 176,000 Total Vatable Sales Net of vat 2,400,000
Non-vatable Sales 1,200,000
VAT PAYABLE 112,000 Total Sales 3,600,000
PROBLEM 3
A VAT taxpayer has the following data on its operations for the month of January:

Sales, total invoice price 592,480


Purchases of Goods, VAT not included
From VAT registered persons 100,000
From Non VAT registered persons 80,000
Purchases of Services, VAT not included
From VAT registered persons 20,000
From Non VAT registered persons 8,000
From persons subject to percentage taxes 10,000
Salaries of employees 60,000
Other operating expenses 12,000

This is the first month of being liable to VAT. Data on inventories at the beginning of the
period brought from VAT registered persons follow:
Inventory at cost 44,800
Inventory at net realizable value 49,000
Value added tax paid on beginning Inventory 4,800

Required:
1. Determine the amount of input taxes
2. Determine the VAT Payable

Required 1
Input tax on goods ( 100,000 × 12%) 12,000
Input tax on Services (20,000 × 12%) 2,400
Opening Total Input tax 4,800
TOTAL INPUT TAX CREDIT 19,200

Required 2
Output tax on Sales,total invoice price (592,480 ×12%) 71,098
Less: Input Tax (Input tax credit) 19,200
VAT PAYABLE 51,898

NOTES
1. VAT input tax is not available if the purchases was made or service
received from a Non VAT registered persons or those persons that pays tax
on a percentage basis.
2. VAT is not classified into Payable Salaries, other operating cost. In short
there's no treatment is required for it.

You might also like