Junior Bookkeeper: Payroll and Monthly SARS Returns

Sample assessment questions

Formative Activity: / Summative Assessment

Introduction
As we have explained before, you need to complete THREE Formative Activities and TWO Formative Evaluation questions for inclusion in your PoE. At EDGE Learning Media, we believe that every learner that enrols for an ICB programme needs to know how he/she will be assessed. You will soon be tasked to complete Formative Activity 3 on the answer templates in your Activity Answer Book provided in your PoE. Remember that the solutions to the Formative Activities and Formative Evaluations will never be provided. It is for this reason that we provide you with a series of questions with solutions below that will adequately prepare you for these two assessments. Work through all of these sample assessment questions and solutions before you attempt the actual assessments for submission.

Topics covered
All the work covered during the course is examinable in the Summative Assessment paper. However, the most important topics to be covered in Formative Activity 3 and the Summative Assessment are: . VAT returns. This is covered in Learning Module 2. Multiple choice questions on Learning Module 8. No samples are included. Payroll calculations. This is covered in Learning Module 5. Accounting for payroll calculations. This is covered in Learning Module 6.

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Sample assessment questions

Sample assessment question 1 (Topic: VAT returns)

Marge Simpson is the owner of Marge Magazine trading as The Magazine World. The business is a registered VAT vendor and accounts for VAT on the invoice basis. You have been supplied with the following information for the January/February 20.10 VAT period. Business information: Address: 56 Hill View Road, Benoni, Johannesburg, 1589 VAT number: 4895625894 VAT area code: 52 Tax period code: 02/10 SARS office telephone number: - 011 7896542 Business telephone number: - 011 8653521 Business fax number: - 011 8653522 Marge completes and pays all her VAT returns on the penultimate day for rendering returns/payments. She pays the return by cheque. Note: All amounts include VAT unless VAT is not applicable. Transactions with non-vendors are indicated with a *

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Cheques issued:
Cheque no. 10 452 10 453 10 454 10 455 10 456 10 457 10 458 10 459 10 460 10 461 10 462 10 463 10 464 10 465 Particulars General store The SPAR Broll Property Group Southern Municipality Southern Municipality The Garage Waltons Cash SA Printers Entertainment world Bellkom SARS A. Venter Pete the Plumber Trading inventory Office refreshments Rent paid Licence for motor vehicle Property tax Amenities Diesel Postage and stationery (for business use) Wages Printing equipment Pool table for staff room Telephone VAT for November/December 20.8 Repayment to creditor Plumbing services* Allocation Amount ( R ) 10 556.00 211.12 4 855.76 316.68 131.95 475.02 591.14 306.12 12 667.20 36 946.00 11 611.60 1 583.40 3 377.92 5 911.36 522.60

Debits on the bank statement: Bank charges, R 240.40. Stop order for short term insurance on delivery vehicle, R 1 881.36. Interest on overdraft, R313.56. Credits on the bank statement: Receipt nos 1214 to 1356 for cash sales, R 80 225.60. Receipt from a debtor, A. Andrews, R 6 793.80.

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Receipts not included above: On 14 January 20.10, an amount of R 13 195.00 was transferred from the U.S.A for goods, which were sold there. On 27 January 20.10, The Magazine World issued an original cash invoice for Editing fees, R 2 322.32. On 20 January 20.10 an old delivery vehicle was sold for cash, R 11 400.48. On 17 January 20.10 the business received an insurance payout on an accident damaged delivery vehicle, R 9 500.40 Other transactions Credit losses written off, R 209.04. Credit notes issued (on standard-rated goods previously sold), R 156.78. On 31 January 20.10, Marge Simpson passed a journal entry for interest on the overdue account of a debtor, A. Jones for R 263.90. On 19 January 20.10, Doctors Inc. purchased goods for R 3 483.48 on credit from The Magazine World. The amount was still outstanding on 25 February 20.10. Required: Calculate the total input and output VAT which Marge Simpson can claim or account for on the above mentioned transactions for January/February 20.10 and complete the VAT return for remittance provided in your answer book. Note: All amounts include VAT where applicable. Transactions with non-registered vendors are indicated with a *.

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Proposed solution:
Calculation of input tax: Purchases (R 10 556.00 x 14/114) Purchases of inventory from a VAT vendor is a standard rated supply. Office refreshments - (Although this may have been purchased from a VAT vendor and VAT paid, it may not be regarded as VAT input because it is a non-allowable item) Rent paid (R 4 855.76 x 14/114) - This is a standard rated supply and will be deductible as VAT input if the invoice is a tax invoice. Licence for motor vehicle (This is an exempt supply) Property tax (Property taxes are a tax in themselves and therefore do not attract VAT and is therefore an Exempt supply) Amenities (R 475.02 x 14/114) Amenities such as water, refuge and electricity are standard rated supplies and therefore deductible if supplied by a registered VAT vendor Diesel (zero-rated supply) Postage and stationery (for business use) (R 306.12 x 14/114) A standard rated supply. Wages (not a supply of goods or services) Printing equipment (R 36 946.00 x 14/114) Printing equipment is a capital asset that will be used in the production of income and therefore VAT input may be claimed. Pool table for staff room (Although the pool table may have been supplied by a VAT vendor and thus VAT paid, it may not be deducted because the asset is not used in the production of income and is therefore a non-allowable item) Telephone (R 1 583.40 x 14/114) The telephone account is a standard rated supply. VAT for November/December 20.8 (not a supply of goods or services) This is a payment. No goods or services have been supplied. Repayment to creditor (not a supply of goods or services) This is a payment. No goods or services have been supplied. Remember: the business is registered on the invoice basis. Plumbing services (not a VAT vendor) Although an invoice for plumbing services would constitute a standard rated supply, the supplier of the service in this instance is not a registered VAT vendor and would thus not have supplied a tax invoice. Bank charges (R 240.40 x 14/114) Bank charges are a standard rated supply. The bank statement serves as the tax invoice. Stop order for short term insurance on delivery vehicle (R 1 881.36 x 14/114). Short term insurance premiums do constitute standard rated supplies and thus the business can claim VAT input. Interest on overdraft (All interest are VAT exempt supplies) Credit losses written off (R 209.04 x 14/114) Credit losses are a standard rated supply. Credit notes issued (R 156.78 x 14/114) Just as VAT output will be charged to a client on the sale of goods or services, so VAT input must be recorded upon the return of such goods or services. Total input VAT The sum of all the VAT input amounts. VAT input on VAT 201 Capital goods or services: Printing equipment. The VAT input on capital (asset) amounts is disclosed separately in Block 14 of the VAT 201. Other goods or services (R 1 296.35 + R 596.32 + R 58.34 + R 37.59 + R 194.45 + R 29.52 + R 231.04). This figure is included in block 15. Credit losses are disclosed separately in block 17 Other: Credit notes issued. The credit notes are also disclosed separately under other in block 18. The total VAT input amount is summed in block 19 R 4 537.23 2 443.61 25.67 19.25 R 7 025.76 VAT input R 1 296.35 0.00 596.32 0.00 0.00 58.34 0.00 37.59 0.00 4 537.23 0.00 194.45 0.00 0.00 0.00 29.52 231.04 0.00 25.67 19.25 R 7 025.76

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Calculation of output tax: Cash sales (R 80 225.60 x 14/114) Sales of inventory by a VAT vendor are standard rated supplies. Exports (Goods or services sold in foreign countries are zero-rated supplies) Credit sales (R 3 483.48 x 14/114) When accounting for VAT on the invoice basis VAT output is charged when the tax invoice is issued and not when the amount owing is received. Receipt from a debtor (not a supply of goods or services) This is a receipt. VAT would have been recorded when the goods or services were sold and the tax invoice issued. Interest on overdue debtors account Interest is always a VAT exempt supply as it is regarded as a supply of financial services. Editing fees (R 2 322.32 x 14/114) This is a sale of services and therefore a standard rated supply. Old delivery vehicle (R 11 400.48 x 14/114) The purchase of the delivery vehicle would have resulted in a Vat input being paid, thus the sale of the capital asset must include VAT output. This is a standard rated supply. Insurance payout on an accident damaged delivery vehicle (R 9 500.40 x 14/114) Just as VAT input can be claimed on the short term insurance premiums, so VAT output is charged on a pay out from such insurance. Total output VAT The sum of all the VAT output amounts.

VAT output R 9 852.27 0.00 R 427.80 0.00 0.00 285.20 1 400.06 1 166.72 *R 13 132.05

VAT output on VAT 201 Standard rated supplies excl. capital goods (R 80 225.60 + R 3 483.48 + R 2 322.32) Block 1 must contain the VAT output on standard rated supplies excluding capital goods and/or services. The VAT on such supply is then inserted in block 4. Standard rated supplies on capital goods. The supply total for capital goods or services is included in block 1A and the VAT output on such supplies in included in block 4A. Adjustments: Insurance payout on an accident damaged delivery vehicle. Insurance payouts are disclosed separately under Other in block 12. The total VAT output amount is summed in block 13

Supply R 86 031.40 R 11 400.48 R 9 500.40

VAT R 10 565.26 R 1 400.06 R 1 166.72 *R 13 132.04

Total VAT payable (R 13 132.04 - R 7 025.76) This is the amount in block 20.

R 6 106.28

* Please note: Minor rounding errors will occur.

The completed VAT return is included on the following page:

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Sample assessment question 2 (Topic: Payroll calculations)

You have been provided with the following information for HD Audio CC for the month of May 2010.
Taxable portion of travel allowance Taxable Taxable value of portion of company medical aid car R 0.00 ? R 0.00 R 0.00 R 0.00

May 2010 Oliver Stander Novak Oscar Charlie Bravo Echo Totals

Age 33 45 22 66 64 25 45

Salary R 5 820.00 R 32 011.00 R 17 461.00 R 20 371.00 R 6 693.00 R 6 693.00 R 7 275.00 R 96 324.00

Travel allowance R 1 164.00 R 8 003.00 R 0.00 R 3 667.00 R 0.00 n/a n/a R 12 834.00

Commission R 0.00 R 4 321.00 R 0.00 R 2 546.00 R 569.00 n/a n/a R 7 436.00

Pension fund deduction

PAYE/SDL remuneration

UIF remuneration

PAYE deduction

? ?
R 0.00

?
R 0.00 n/a n/a R 10 267.20

?
n/a n/a R3 728.07

? ? ? ?
n/a n/a R 2 805.19

? ? ? ? ?
n/a n/a R 6 176.72

? ? ? ? ? ? ?
R 114 383.74

? ? ? ? ? ? ?
R 61 432.43

? ? ? ? ? ? ?
R 23 585.26

Additional information: 1. The following tax sliding scale for individuals applied for the year ended 28 February 2011:
TAXABLE INCOME R 0 140 001 221 001 305 001 431 001 552 001 R 140 000 221 000 25 200 305 000 45 450 431 000 70 650 552 000 114 750 and over 160 730 + + + + + R 18% of every R1 25% of the amount over 30% of the amount over 35% of the amount over 38% of the amount over 40% of the amount over 140 000 221 000 305 000 431 000 552 000 RATES OF TAX R

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

2. 3. 4. 5. 6. 7. 8. 9. 10.

11.

Both Novak and Oscar receive a 13th cheque. The business smoothes the tax on the bonus throughout the year. Charlie has the full use of a company car. This car (a delivery vehicle) had cost the business R 170 000.00 (including VAT) when it was bought and allocated to him last year. Car allowances are taxed at 2.50% p.m. on cost. Permanent employees contribute 7.50% of their basic salary to the Old Pension Fund (13 th cheques are also pensionable). SA Trading CC contributes to the pension fund on a rand-for-rand basis. Bravo and Echo are part time employees that worked for 25 and 18 hours for the month respectively. Employees are not entitled to housing, cellphone or computer allowances. There are no independent contractors or employees on registered learnerships. Only 80.00% of the travel allowance is taxable Assume a maximum UIF funding salary of R 12 478.00. All permanent employees belong to the Strong Health Scheme, a registered medical scheme and have all provided adequate proof of membership to their employer. The company pays the whole contribution to the medical aid. The following tax concessions apply to medical fund contributions: R 670.00 for the sole member. R 670.00 for the first additional dependant. An additional R 410.00 is allowed as a deduction per additional dependant other than the first dependant. All contributions paid for an employee aged 65 or older are allowed as a deduction. The staff members have the following number of dependants and medical aid contributions:
Employee Oliver Stander Novak Oscar Charlie No. of dependants 1 2 1 4 0 Total monthly contribution paid to medical aid R 698.40 R 3 841.32 R 1 920.71 R 3 259.36 R 803.16

12.

The rebates allowed in the South African tax system are as follows for the 2010/2011 tax year: Primary rebate R 10 260.00 Secondary rebate R 5 675.00

Required: (a) (b) Complete the table provided in your answer book. Make use of the sliding scale schedule. Complete the abbreviated EMP201 in your answer book.

Note: Show all your calculations

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Proposed solution:
(a)

May 2010 Oliver Stander Novak Oscar Charlie Bravo Echo Totals

Age 33 45 22 66 64 25 45

Salary R 5 820.00 R 32 011.00 R 17 461.00 R 20 371.00 R 6 693.00 R 6 693.00 R 7 275.00 R 96 324.00

Travel allowance R 1 164.00 R 8 003.00 R 0.00 R 3 667.00 R 0.00 n/a n/a R 12 834.00

Commission R 0.00 R 4 321.00 R 0.00 R 2 546.00 R 569.00 n/a n/a R 7 436.00

Taxable portion of travel allowance R 931.20 R 6 402.40 R 0.00 R 2 933.60 R 0.00 n/a n/a R 10 267.20

Taxable value of company car R 0.00 R 0.00 R 0.00 R 0.00 R 3 728.07 n/a n/a R 3 728.07

Taxable portion of medical aid R 0.00 R 2 091.32 R 580.71 R 0.00 R 133.16 n/a n/a R 2 805.19

Pension fund deduction R 436.50 R 2 400.83 R 1 309.58 R 1 527.83 R 501.98 n/a n/a R 6 176.72

PAYE/SDL remuneration R 6 314.70 R 42 424.89 R 16 732.13 R 24 322.77 R 10 621.25 R 6 693.00 R 7 275.00 R 114 383.74

UIF remuneration R 6 751.20 R 12 478.00 R 12 478.00 R 12 478.00 R 10 554.23 R 6 693.00 n/a R 61 432.43

PAYE deduction R 281.65 R 11 180.62 R 2 847.85 R 4 726.31 R 1 056.83 R 1 673.25 R 1 818.75 R 23 585.26

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Calculations: 1. Calculation of monthly PAYE/SDL and UIF remuneration

Taxable portion of monthly travel allowance (60 %) (b) R 931.20 R 6 402.40 R 0.00 R 2 933.60 R 0.00 Monthly Monthly taxable Monthly value of portion of commission company car medical aid (c) fringe benefit fringe benefit (d) (e) R 0.00 R 4 321.00 R 0.00 R 2 546.00 R 569.00 R 7 436.00 R 0.00 R 0.00 R 0.00 R 0.00 R 3 728.07 R 3 728.07 R 0.00 R 2 091.32 R 580.71 R 0.00 R 133.16 R 2 805.19 Monthly Pension fund deduction (f) R 436.50 R 2 400.83 R 1 309.58 R 1 527.83 R 501.98 PAYE/SDL UIF remuneration remuneration (g) = (a) + (b) (h) = (g) - (c) + + (c) + (d) + (f) but limited (e) - (f) to R 12 478 R 6 314.70 R 42 424.89 R 16 732.13 R 24 322.77 R 10 621.25 R 6 693.00 R 7 275.00 R 6 751.20 R 12 478.00 R 12 478.00 R 12 478.00 R 10 554.23 R 6 693.00 n/a R 61 432.43

Employee

Age

Monthly salary (a)

Oliver Stander Novak Oscar Charlie Bravo Echo Totals

33 45 22 66 64 25 45

R 5 820.00 R 32 011.00 R 17 461.00 R 20 371.00 R 6 693.00 R 6 693.00 R 7 275.00

R 96 324.00 R 10 267.20

R 6 176.72 R 114 383.74

2.

Calculation of monthly PAYE deduction

Annual PAYE as per the sliding scale/flat rate before rebates (e) R 13 639.75 R 144 427.50 R 44 434.25 R 72 650.74 R 22 941.90 R 20 079.00 R 21 825.00 R 339 998.14

Employee

Monthly PAYE Annual bonus remuneration (b) (a) R 6 314.70 R 42 424.89 R 16 732.13 R 24 322.77 R 10 621.25 R 6 693.00 R 7 275.00 R 114 383.74 R 0.00 R 0.00 R 17 461.00 R 20 371.00 R 0.00 R 37 832.00

Pension on annual bonus (c) R 0.00 R 0.00 R 1 309.58 R 1 527.83 R 0.00 -

Annual taxable income (d) = (a) + (b) - (c) R 75 776.40 R 509 098.68 R 216 936.98 R 310 716.41 R 127 455.00 R 80 316.00 R 87 300.00

Total applicable rebates (f) R 10 260.00

Annual PAYE payable (g) = (e) - (f) R 3 379.75

Monthly PAYE deduction (h) = (g)/12 R 281.65 R 11 180.62 R 2 847.85 R 4 726.31 R 1 056.83 R 1 673.25 R 1 818.75 R 23 585.26

Oliver Stander Novak Oscar Charlie Bravo Echo Totals

R 10 260.00 R 134 167.50 R 10 260.00 R 15 935.00 R 10 260.00 R 34 174.25 R 56 715.74 R 12 681.90 R 20 079.00 R 21 825.00

R 2 837.41 R 1 407 599.47

R 56 975.00 R 283 023.14

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

(b)

Name of business: Return for: Submission date: Payment Details

Elite Traders CC May 2010 On or before 7 June 2010

EMP 201 "Extract" For illustrative purposes only

PAYE R Amounts payable 4 c R 23 585.26 5 R

SDL c R 1 143.84 R 6 c R 25 957.75 R

UIF c R 1 228.65

Control total (4 + 5 + 6 = 7)

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Sample assessment question 3 (Topic: Accounting for payroll)

The information what follows relates to the salaried employees of SA Trading CC for the month of May 2010. Assume a maximum UIF funding salary of R 12 478.00. Ignore voluntary deductions. Assume that all payroll creditors were paid in full by EFT on 30 May 2010.

Salaries register of SA Trading CC - May 2010 Deductions Net salary UIF (324) Andrews (325) Burtram (326) Cool (327) Deawalt (328) Nkosi (329) Ndlovu (330) Pillay 7 872.00 32 674.00 22 545.00 24 536.00 7 413.00 6 832.00 7 426.00 109 298.00 69.34 124.78 124.78 124.78 107.79 n/a 74.26 625.73 PAYE 546.52 8 542.03 3 663.09 4 365.32 637.02 1 708.00 1 856.50 21 318.48 Pension fund 386.17 2 123.81 1 158.43 1 351.55 444.08 5 464.04 Total/ balance 1 002.03 10 790.62 4 946.30 5 841.65 1 188.89 1 708.00 1 930.76 27 408.25 6 869.97 21 883.38 17 598.70 18 694.35 6 224.11 5 124.00 5 495.24 Medical aid 712.92 3 920.88 1 960.42 3 326.88 819.84 Pension fund 386.17 2123.81 1158.43 1351.55 444.08 5 464.04 UIF 69.34 124.78 124.78 124.78 107.79 n/a 74.26 625.73

SR 5
Employers contributions SDL 72.91 327.21 208.52 231.93 109.16 68.32 74.26 1 092.31

Employee no. & name

Gross salary

81 889.75 10 740.94

Required:

Open, post to and balance the following accounts in the general ledger of SA Trading CC: EMP201 control (B7) Creditors for salaries (B8) Plong Pension Fund (B9) Fit Health Scheme (B10) Salaries expense (N8) Medical aid contributions (N9) UIF contributions (N10) SDL contributions (N11) Pension contributions (N12)

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Proposed solution:
General ledger of SA Trading CC

EMP201 control Date 2010 May. 31 Bank CBP5 23 662.25 Details Fol. Amount Date 2010 May. 31 Salaries expense (UIF) Salaries expense (PAYE) UIF contributions SDL contributions 23 662.25 Details

B7 Fol. Amount

SR5 SR5 SR5 SR5

625.73 21 318.48 625.73 1 092.31 23 662.25

Creditors for salaries Date 2010 May. 31 Bank CBP5 81 889.75 Details Fol. Amount Date 2010 May. 31 Salaries expense Details

B8 Fol. Amount

SR5

81 889.75

Plong Pension Fund Date 2010 May. 31 Bank CBP5 10 928.08 Details Fol. Amount Date 2010 May. 31 Salaries expense Pension contributions 10 928.08 Details

B9 Fol. Amount

SR5 SR5

5 464.04 5 464.04 10 928.08

Fit Health Scheme Date 2010 May. 31 Bank CBP5 10 740.94 Details Fol. Amount Date 2010 May. 31 Medical aid contributions Details

B10 Fol. Amount

SR5

10 740.94

Salaries expense Date 2010 May. 31 Gross salaries SR5 109 298.00 Details Fol. Amount Date Details

N8 Fol. Amount

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Junior Bookkeeper: Payroll and Monthly SARS Returns Sample Assessment Questions Formative Activity 3 & Summative Assessment

Medical aid contributions Date 2010 May. 31 Fit Health Scheme SR5 10 740.94 Details Fol. Amount Date Details

N9 Fol. Amount

UIF contributions Date 2009 Oct. 31 EMP201 control SR10 625.73 Details Fol. Amount Date Details

N10 Fol. Amount

SDL contributions Date 2010 May. 31 EMP201 control SR5 1 092.31 Details Fol. Amount Date Details

N11 Fol. Amount

Pension contributions Date 2010 May. 31 Plong Pension Fund SR5 5 464.04 Details Fol. Amount Date Details

N12 Fol. Amount

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