Presentation Question
Dee (PVT) Ltd a registered operator is involved in manufacturing and wholesaling of clothing,
machinery and basic commodities. The company is also involved in exports. The company is in
category C. The following information was for the month of August 2019. The amounts are
inclusive of VAT wherever it is applicable:
Cash sales
$125,000
Credit sales
90,000
Exports
5,000
Zero rated sales
5,000
Exempt sales – (Diesel)
3,000
Repossessed machinery cash sale
2,000
Expenses incurred
Stationery
2,000
Auto electrical repairs for delivery truck
1,000
Repairs on company vehicles
5,000
Salaries
8,000
Spare parts for delivery truck
12,000
Clothing purchases
5,000
New plant acquired from Ziso Engineering
26,000
Bonuses paid to employees for exceeding month target
1,000
New T35 Trucks
43,000
Stock purchases zero rated
3,000
Tyres for the trucks
800
Diesel
7,000
Entertainment
2,800
Bad debts written off
2,000
2 computers @ $500 each
1,000
Computer consumables
5,000
Legal fees
1,000
NOTES
a) The company had 5 employees who are entitled to the use of company vehicles. The
vehicle’s engine capacities range between 1,600 to 1,900cc
b) The two new delivery Trucks were acquired for $15,000 and $28,000 from Willowvale
Mazda Motor Industries. The trucks were estimated to be used 60% and 92% respectively to
make taxable supplies. The amounts are inclusive of VAT.
c) The company issued a debit note of $2,000 to a client who had purchased clothing from the
company shop
d) The company received a debit note of $800 on bread which had been acquired in the
previous month
e) The company received a credit note from a supplier who had supplied them with spare
parts of $500,00 for the period January 2018.
f) Legal fees were in respect of fees paid by the company to Musvi and Partners Legal Firm for
representing the Managing Director for a divorce lawsuit from his estranged wife
g) The entertainment was in respect of a cocktail party held for customers
h) The company also recovered a bad debt during the tax period of about $1,000 in respect of
supplies of clothing. The company had claimed input tax on the bad debt in November 2017
i) The company repossessed machinery whose value including VAT was $4200. The client had
only paid $1000. The consideration was the cash price of the machine. The machinery was
resold for $2000 during the tax period.
j) The two computers bought at $500 each were used one 95% and the other 85% for making
taxable supplies.
k) The bad debts included the following;
 Spare parts- $1200,00
 Diesel
-$800,00
Required
Calculate the VAT payable or refundable for August 2019 (show all your workings). (30 Marks)