The factory has to pay the VAT to SARS (South African RevenueMs. Rennet is a retired advocate. She always wanted to be a business woman,her, she decided to start a business which specialises in selling handbags.but did not have the time to fulfil her dream. With the money that was paid out toMs. Rennet must pay VAT (Value Added Tax) to the factory for the bags.QUESTION 3Ms Rennet buys the bags directly from the factoryService).When customers buy bags from Ms. Rennet they pay VAT to her and shehas to pay VẬT to SARS.PLEASE NOTE:Ms Rennet will not pay all the VAT that she receives from her customers toSARS, The VAT that she has to pay to SARS is the difference between what shereceived from her customers and what she paid to the factory..Ms. Rennet buys 500 handbags from the factory at R 120 each (excluding VAT).She then sells the handbags to her customers for R 190 each (VATinclusive)3.1Calculate how much VAT the factory has to pay to SARS for the bags thatMs. Rennet bought.3.1.1How much VAT does Ms. Rennet receive from her customers for the bags?S.1.2 Ms. Rennet also has to pay SARS for the VAT she received from her customers.How much VAT will she pay to SARS?3.1.3

The amount of VAT paid by the user is dependent on the cost of the product, less any costs of…

Answered: her, she decided to start a business…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Alex Kingsford is a mechanical engineer working for ABC engineering in Melbourne. Alex owns a property in then Dandenong Victoria where he and his family are residing. He also runs a home-based food catering business, preparing food for local residents and school canteens. Catering business is very structured. Alex works 15 days a month and earns a substantial income from the catering service business. He is travelling from ABC engineering workshop to his homeBy car or sometimes Uber.When he lost his tax return in July 2019 he has requested a deduction for a substantial amount of travelling expenses between the ABC engineering workshop and home-based food business. Alex is now seeking your advice with reference to relevant legislation and case law discuss whether Alex travelling expenses between the ABC engineering workshop and his homebase catering business is an allowable deduction.
Dr. Nicely, self-employed, began her career in general practice. After a couple of years, however, she came to realize that she would be a lot happier – and make a lot more money – if she specialized in cosmetic surgery. So she went back to school in the evenings, took enough courses, then transitioned her practice into “making people beautiful.” She certainly is earning more now. In fact she’s all-around thrilled . . . but also tax-confused. So she calls you, her CPA, to ask whether she can deduct all of the cost(s) she’d reasonably incurred toward her goal of moving from general practice into cosmetic surgery. Your response, and why?
T grows beets in her own garden. Although T detests beets, she will be required torecognize income when:a. She harvests her beets.b. She consumes beets that she could have sold for $100.c. She sells beets for $100 to somebody who actually likes them.d. She exchanges $100 worth of beets for $100 worth of spinach grown by herneighbor.e. Both (c) and (d) are correct T (a cash method taxpayer) pays $250,000 for a house to be held as an investment (it isactually worth $300,000).a. In all cases, T would be required to recognize $50,000 as income in the year hebuys the house.b. T will never be required to recognize income until he disposes of the house inan arm’s length sale or exchange.c. If T acquired the house from a person who owes him $50,000 for services rendered,T would be required to recognize $50,000 as income in the year he buysit.d. (c) would be the correct answer only if T accepts the house in satisfaction of thedebt owed to him for services rendered.e. None of the above.
Dawn is a director of the Manello Corporation. Bert, a friend of Dawn's and an inventor, creates a new product. Bert wants Manello to handle the production and marketing of this new product, so Bert discusses his new invention with Dawn. Dawn thinks the new invention will be a huge success, but in order to maximize her personal income, Dawn suggests to Bert that she handle the manufacturing and marketing, leaving Manello out of it completely. Bert agrees. Discuss the propriety of Dawn's actions in this situation. Would the outcome be any different if Dawn were merely a shareholder owning 4 percent of Manello? Please solve and analyze this case. use facts, issue, analysis conclusion. What would be the likely outcome in court.?
Veronica and Jasmine are twin sisters. They recently bought a townhouse together because they knew that they couldn’t afford to buy one on their own. They live in a small community where cost of living is less, but so are incomes. Veronica works as a hair stylist and makes about $800.00 a week and Jasmine is a store manager and brings home just a bit more, $900.00 a week. There mortgage payment is $950.00 a month and utilities, phone, cable and internet cost an addition $600.00. Their grocery bill is approximately $600.00 a month because both girls enjoy entertaining and having friends over. Veronica is paying off her student loan from hair stylist school and that costs an additional $156.00 per month. Their car payments are $800.00 per month and their gas is only $150.00 as everything is located so close together. They are hoping to go to Cuba with some friends for a week in November. The cost of the trip is $685.00 each. November is four months away. Will they be able to save enough…
Jane is a roofing contractor. Jane's friend needed a new roof but did not have the cash to pay. Jane's friend instead paid with a used truck that Jane could use in her roofing business. The truck had originallycost the friend $17,500 but it was gently used and only worth $6,000. Jane did not actually need the truck and ended up selling it to a used car dealer for $5,200 a few months later. Explain what amount of gross income Jane must recognize as a result of the truck payment and why.
Judy is a 16-years old who just got her first job. She wants a credit card or debit card to spend money she will be earning. Judy’s parents worry about her spending money she doesn’t own, and don’t want her to accrue heavy interest. Which type of card should she get. a) Credit card with no fee b) A debit card Explain your choice:

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