TUTORIAL QUESTIONS : MGMT 3051 25th March 2021 1. AJAX Limited is a resident company of Trinidad and Tobago and involved primarily in the business of the retail of sporting goods. It is also a VAT registrant. For the 2month VAT period ending 31st March 2021 the following activities are relevant to the determination of its VAT liability for such period. a. Sales inclusive of VAT for the period amounted to $500,000 of which $40,000 related to zero rated sales. b. A business vehicle was sold to the majority shareholder for $10,000. The motor vehicle based on its age and condition has an open market value of $150,000 exclusive of VAT. The proceeds of this sale was not included in the sales figures in (a) above. c. A bad debt of $5,000 was recovered relating to a trading debt which was written off 18 months ago relating to a standard rated supply. d. On 10th March, 2021 it received an indemnity payment from its insurers related to loss of stock of $20,000. The insurers indicated it had complied with the provisions of the VAT Act in relation to the payment. e. Purchases made inclusive of VAT for the period amounted to $230,000 of which $15,000 related to zero rated purchases. f. In addition, the company received a credit note from a supplier of $2,000 (VAT INCLUSIVE); this related to a standard rated supply it received 6 months ago. A. Calculate the VAT Liability for Ajax Limited for the VAT period ending 31st March, 2021. You are also required to indicate how the indemnity payment should be treated by both the insurer and the registrant in accordance with the VAT Act. B. In a retail business, at what point in time should the commercial supply be reported and does this differ in circumstances whereby services are supplied continuously and with respect to construction projects.