Mr Ali is an employee of Alba Ltd. He has the use of a car which is used for both business and private mileage for the current VAT quarter. Alba Ltd pays all the petrol costs in respect of the car, totaling £1,700 of which 30% is for private mileage. The relevant quarterly scale charge is £717. Both figures are inclusive of VAT. Required (a) What is the VAT effect of the above on Alba Ltd if it uses the quarterly scale charge? What is the VAT effect of the above on Alba Ltd if it charges John for the private fuel? (b)

Mr Ali is an employee of Alba Ltd. He has the use of a car which is used for both business and private mileage for the current VAT quarter. Alba Ltd pays all the petrol costs in respect of the car, totaling £1,700 of which 30% is for private mileage. The relevant quarterly scale charge is £717. Both figures are inclusive of VAT. Required (a) What is the VAT effect of the above on Alba Ltd if it uses the quarterly scale charge? What is the VAT effect of the above on Alba Ltd if it charges John for the private fuel? (b)

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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Please show your solution in good accounting form. Thank you!
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Vishal
Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay one-third of the sales price of a jet ski when they initially purchase the ski, and then pay another one-third each year for the next two years. Because Lake has little information about the ability to collect these receivables, it uses the installment sales method for revenue recognition. In 2020, Lake began operations and sold jet skis with a total price of $1,050,000 that cost Lake $525,000. Lake collected $350,000 in 2020, $350,000 in 2021, and $350,000 in 2022 associated with those sales. In 2021, Lake sold jet skis with a total price of $1,770,000 that cost Lake $1,062,000. Lake collected $590,000 in 2021, $525,000 in 2022, and $525,000 in 2023 associated with those sales. In 2023, Lake also repossessed $130,000 of jet skis that were sold in 2021. Those jet skis had a fair value of $48,750 at the time they were repossessed.Total cash collections on installment sales during 2021 would be:…