Question

Musa started a new retail business, Musa’s Bargains, on 1 March 2019. The business was voluntarily registered as a VAT vendor. VAT is applicable at 15%. The business decided it was going to use the perpetual inventory system to record its inventory transactions. The following transactions took place during the month of March 2019: 1. Purchased trading inventory for cash R57 000 (exclusive of VAT). 2. Trading inventory, which had a cost of R28 000, was sold for cash. 3. A physical stock take on 31 March 2019 revealed that the business had trading inventory valued at R28 200. Additional information: 1. Musa consistently marks all trading goods at 60% on cost price. 2. As the business was new, there was no inventory on hand at 1 March 2019. 3. The above were the only inventory transactions that took place during March. Required Record the above transactions in the general journal of Musa’s Bargains for March 2019. Clearly show your workings to calculate the Vat input and the Vat Output in the above transactions.

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