VAT Control : incorrect trial balance amount is R43 094.66 Cr, recommend adjustments is R44.95 Dr and R14.99 Cr, the correct trial balance amount is R43 064.70 Can you show me how the amount R43 064.70 was accurately calculated?

Accounting

ScanSolve AI Answer

Answer

R43,064.70 Cr\text{R43,064.70 Cr}

Step-by-step solution

4 steps

let's break down the calculation for the VAT Control account.

  1. Identify the initial incorrect trial balance amount for VAT Control.

    The problem states the incorrect trial balance amount for VAT Control is R43,094.66 Cr.

  2. Identify the recommended adjustments affecting VAT Control.

    • Adjustment 1: R44.95 Dr (from the irrecoverable debt write-off, reversing output VAT).
    • Adjustment 2: R14.99 Cr (from the office refreshments, reversing erroneously claimed input VAT).

  3. Calculate the net effect of the adjustments on the VAT Control account.

    A credit balance increases with a credit adjustment and decreases with a debit adjustment.

    Net Adjustment=Debit R44.95−Credit R14.99\text{Net Adjustment} = \text{Debit } R44.95 - \text{Credit } R14.99 Net Adjustment=Debit (44.95−14.99)\text{Net Adjustment} = \text{Debit } (44.95 - 14.99) Net Adjustment=Debit R29.96\text{Net Adjustment} = \text{Debit } R29.96

    So, the net recommended adjustment is a Debit of R29.96.

  4. Calculate the correct trial balance amount for VAT Control.

    Start with the incorrect credit balance and apply the net debit adjustment.

    Correct Trial Balance Amount=Incorrect Credit Balance−Net Debit Adjustment\text{Correct Trial Balance Amount} = \text{Incorrect Credit Balance} - \text{Net Debit Adjustment} Correct Trial Balance Amount=R43,094.66 Cr−R29.96 Dr\text{Correct Trial Balance Amount} = R43,094.66 \text{ Cr} - R29.96 \text{ Dr} Correct Trial Balance Amount=R43,064.70 Cr\text{Correct Trial Balance Amount} = R43,064.70 \text{ Cr}

    Therefore, the correct trial balance amount for VAT Control is R43,064.70 Cr\boxed{\text{R43,064.70 Cr}}.

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