Help with cash book VAT
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Chrisb76
Registered Posts: 7
Hi All,
The question is: you receive a cash receipt for £326 cash and a £1000 cheque. How do i work out the VAT for this??
Any help would be appreciated.
Thanks
Chris
The question is: you receive a cash receipt for £326 cash and a £1000 cheque. How do i work out the VAT for this??
Any help would be appreciated.
Thanks
Chris
0
Comments
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Well, assuming that VAT is calculated on a cash basis and both the payment and receipt relate to vatable items...
VAT output = £65.20 (£326 x 20%)
VAT input = £200 (£1000 x 20%)
VAT recoverable = £134.80 (£200 - £65.20)AAT
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Looking at the sample cbt answer sheet the answer is £221. It's on the debit side of the book. Cash column is 326, bank column is 1000, VAT is 221 and cash sales column is 1105. I'm just not sure how the 221 is worked out.0
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It's the output VAT on £1326..........0
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Yep cheers ive just realized what i did wrong lol0
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You didn't write the question out too clearly in your first post.Chrisb76 said:Yep cheers ive just realized what i did wrong lol
It's not. The VAT output is on the £1105 sales. £1105 x 20% = £221.TreadStone said:It's the output VAT on £1326..........
AAT
Level 2 - 2011
Level 3 - 2012
Level 4 - 2013
ACCA
F4 - Corporate Law - Dec 2015 (passed)
F5 - Performance Management - Dec 2014 (passed)
F6 - Taxation - Dec 2013 (passed)
F7 - Financial Reporting - Jun 2014 (passed)
F8 - Audit & Assurance - Dec 2015 (passed)
F9 - Financial Management - Jun 2015 (passed)0 -
Which is the output on £1326 is it not ?
For the pedantic, maybe I should have said inclusive. Depends on how you read it.0 -
Can't we just divide the total by 6.0
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Does it really matter ?
The OP was happy enough upon realising her error.0 -
You can, but that won't teach you how to calculate VAT if the rate changes.Neillaw said:Can't we just divide the total by 6.
If you use 0.2/1.2 x £1326 = £221, you will be better served in the long run.
So if the rate changed to 15% you would just adjust accordingly.
For example,
0.15/1.15 x £115 = £15.AAT
Level 2 - 2011
Level 3 - 2012
Level 4 - 2013
ACCA
F4 - Corporate Law - Dec 2015 (passed)
F5 - Performance Management - Dec 2014 (passed)
F6 - Taxation - Dec 2013 (passed)
F7 - Financial Reporting - Jun 2014 (passed)
F8 - Audit & Assurance - Dec 2015 (passed)
F9 - Financial Management - Jun 2015 (passed)0 -
Sure, I'm just highlighting for OP that the VAT is charged on the sales. Didn't mean it to sound so dismissive.TreadStone said:Which is the output on £1326 is it not ?
For the pedantic, maybe I should have said inclusive. Depends on how you read it.AAT
Level 2 - 2011
Level 3 - 2012
Level 4 - 2013
ACCA
F4 - Corporate Law - Dec 2015 (passed)
F5 - Performance Management - Dec 2014 (passed)
F6 - Taxation - Dec 2013 (passed)
F7 - Financial Reporting - Jun 2014 (passed)
F8 - Audit & Assurance - Dec 2015 (passed)
F9 - Financial Management - Jun 2015 (passed)0
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