Value Added Tax (VAT). Notes. 1- The amount shall be paid if the total Sales VAT is greater than the sum of the purchase VAT. 2- The amount of the return if the total Sales VAT is less than the sum of the purchase.
1- The amount shall be paid if the total Sales VAT is greater than the sum of the purchase VAT.
2- The amount of the return if the total Sales VAT is less than the sum of the purchase.
3- Amount to pay the difference between VAT on sales and VAT on purchase.
The following are some information for Hadara Company, and tax registration number 563105114 for 12/2009:
1- On 3/12 purchased 5 fridges amounted 3000 per unit and not include VAT, from Naser Company invoice number 64 on credit.
2- On 7/12 purchased 5 TVs 16« with price 1300 per unit, and 6 TVs 20« with price 1700 per unit and the price not include VAT, invoice number 257.
3- On 16/12 purchased 10 fans with price 105 per unit include VAT and 8 heaters with price 120 per unit include VAT from Sharaf Company invoice number 346 with cheque.
4- On 31/12 paid Paltel expense invoice number 791 with total amount 232 .
5- On 31/12 the company return 2 fridges to Naser company and get sales return invoice number 6.
1- On 3/12 sold 3 fridges with total value 12600.
2- On 15/12 sold 4 SONY TVs 16« with price 1800 per unit includes VAT and 6 TVs 20« with price 2200 per unit include VAT with cheque.
3- On 23/12 sold 8 fans with basic value 760 by cheque.
Note : The NIS is the currency used.
1-Prepare the statement of sales and purchase for 12/2009.
2-Prepare the journal entries for the transactions that occurred on 12/2009.
3- Determine the VAT to be paid or refund, and prepare the related entries.
Purchase entries: include
Sales entries: include
VAT = In tax – out tax = include 4289.23– 3981.04 = 308.19
The adjusting entry for preparingfinancial statement 12/2009 is:
Accrued VAT 308.19
According to the tax law (VAT must be paid before 15/1/2010)
The entry of :
Accrued VAT 308.19