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QUESTION 1 (30 marks) Megan's Salon is a beauty parlour that provides beauty related goods and services. The business is registered for valued added tax. The VAT rate is 15%. The business uses the perpetual inventory system to record inventory and has a February year- end. On the 31 January 2021, the SARS VAT Account had a credit balance of R10 500. The following information has been extracted from the accounting records of the business for the month ended 28 February 2021: 1380 15 750 Output VAT per cash receipts journal Output VAT per sales journal Input VAT per cash payments journal Input VAT per purchases journal 2 400 7 800 The following additional financial information provided for the month of February 2021 has not been recorded in the accounting records, a. A car was purchased for R345 000, including VAT, for the business in cash. b. A credit sale for beauty products to the value of R1 500 excluding VAT (original cost R750 excluding VAT) has not been recorded in the sales journal. c. The owner, Megan paid the telephone account of R1 150 inclusive of VAT from her personal funds. d. On 28 February, Megan's Salon received a cheque from a debtor for R2 300 in full settlement of his debt. His debt of R2 300 was previously written off and accounted for as irrecoverable on 22 January 2021. No entry has been processed for this recovery REQUIRED: 1.1) Prepare the general journal entries to record the transactions (a-d) that have not been recorded in the accounting records of the business. (22 marks) 1.2) Prepare the SARS (VAT) account in the General Ledger of Megan's Salon for the month of February 2021. The account must be properly balanced or closed oft (8 marks) Aligns to SAICA competencies: 11.-2.2 Accounts for the entity's routine transactions Analyses and calculates, or evaluates, the accounting for routine transactions (e.g. sales, cost of sales, operating expenses) Calculates Value Added Tax (VAT) Calculates the VAT payable / refundable VII-2.2

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