The payment of staff refreshments from petty cash of R 467.50. VAT is levied at 15%. This will be recorded as…

Question

The payment of staff refreshments from petty cash of R 467.50. VAT is levied at 15%. This will be recorded as follows in the petty cash journal:

ScanSolve AI Tutor · Accepted Answer

Here's how to record the payment of staff refreshments in the petty cash journal:

Identify the total amount paid from petty cash.
The problem states that the payment is "from petty cash of R 467.50". Therefore, the Petty Cash column in the petty cash journal will show a payment of R 467.50.
Calculate the ex-VAT amount for staff refreshments.
The total amount of R 467.50 includes VAT at 15%. To find the cost of the refreshments before VAT, divide the total by (1 + VAT rate):
$\text{Ex-VAT amount} = \frac{\text{Total amount}}{1 + \text{VAT rate}}$ $\text{Ex-VAT amount} = \frac{\text{R } 467.50}{1 + 0.15}$ $\text{Ex-VAT amount} = \frac{\text{R } 467.50}{1.15}$ $\text{Ex-VAT amount} = \text{R } 406.52$
This R 406.52 will be recorded in the Staff Refreshments column.
Calculate the VAT amount.
The VAT amount is the total amount paid minus the ex-VAT amount:
$\text{VAT amount} = \text{Total amount} - \text{Ex-VAT amount}$ $\text{VAT amount} = \text{R } 467.50 - \text{R } 406.52$ $\text{VAT amount} = \text{R } 60.98$
Since the business is paying for an expense, this VAT is VAT input (VAT paid on purchases).
Match the calculated amounts with the given options.
- Petty cash column: R 467.50
- VAT input column: R 60.98
- Staff refreshments column: R 406.52
Option a matches these calculations.

The final answer is $\text{a}$

The payment of staff refreshments from petty cash of R 467.50. VAT is levied at 15%. This will be recorded as follows in the petty cash journal: