sample assessment summative

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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. .

Junior Bookkeeper: Payroll and Monthly SARS Returns

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 *



Cheques issued:

Cheque no. Particulars Allocation Amount ( R )

10 452 General store Trading inventory 10 556.00

10 453 The SPAR Office refreshments 211.12

10 454 Broll Property Group Rent paid 4 855.76

10 455 Southern Municipality Licence for motor vehicle 316.68

10 456 Southern Municipality Property tax 131.95

Amenities 475.02

10 457 The Garage Diesel 591.14

10 458 Waltons Postage and stationery (for business use) 306.12

10 459 Cash Wages 12 667.20

10 460 SA Printers Printing equipment 36 946.00

10 461 Entertainment world Pool table for staff room 11 611.60

10 462 Bellkom Telephone 1 583.40

10 463 SARS VAT for November/December 20.8 3 377.92

10 464 A. Venter Repayment to creditor 5 911.36

10 465 Pete the Plumber Plumbing services* 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 no’s 1214 to 1356 for cash sales, R 80 225.60.

Receipt from a debtor, A. Andrews, R 6 793.80.



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 *.



Proposed solution:

Calculation of input tax: VAT input

Purchases (R 10 556.00 x 14/114) – Purchases of inventory from a VAT vendor is a standard rated supply. R 1 296.35

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)

0.00

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.

596.32

Licence for motor vehicle (This is an exempt supply) 0.00

Property tax (Property taxes are a tax in themselves and therefore do not attract VAT and is therefore an Exempt supply)

0.00

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

58.34

Diesel (zero-rated supply) 0.00

Postage and stationery (for business use) (R 306.12 x 14/114) – A standard rated supply. 37.59

Wages (not a supply of goods or services) 0.00

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.

4 537.23

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)

0.00

Telephone (R 1 583.40 x 14/114) – The telephone account is a standard rated supply. 194.45

VAT for November/December 20.8 (not a supply of goods or services) – This is a payment. No goods or services have been supplied.

0.00

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.

0.00

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.

0.00

Bank charges (R 240.40 x 14/114) – Bank charges are a standard rated supply. – The bank statement serves as the tax invoice.

29.52

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.

231.04

Interest on overdraft (All interest are VAT exempt supplies) 0.00

Credit losses written off (R 209.04 x 14/114) – Credit losses are a standard rated supply. 25.67

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.

19.25

Total input VAT – The sum of all the VAT input amounts. R 7 025.76

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.

R 4 537.23

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.

2 443.61

Credit losses are disclosed separately in block 17 25.67

Other: Credit notes issued. – The credit notes are also disclosed separately under ‘other’ in block 18. 19.25

The total VAT input amount is summed in block 19 R 7 025.76



Calculation of output tax: VAT output

Cash sales (R 80 225.60 x 14/114) – Sales of inventory by a VAT vendor are standard rated supplies. R 9 852.27

Exports (Goods or services sold in foreign countries are zero-rated supplies) 0.00

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.

R 427.80

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.

0.00

Interest on overdue debtors account – Interest is always a VAT exempt supply as it is regarded as a supply of financial services.

0.00

Editing fees (R 2 322.32 x 14/114) – This is a sale of services and therefore a standard rated supply. 285.20

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.

1 400.06

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.

1 166.72

Total output VAT – The sum of all the VAT output amounts. *R 13 132.05

VAT output on VAT 201 Supply VAT

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.

R 86 031.40 R 10 565.26

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.

R 11 400.48 R 1 400.06

Adjustments: Insurance payout on an accident damaged delivery vehicle. Insurance payouts are disclosed separately under ‘Other’ in block 12.

R 9 500.40 R 1 166.72

The total VAT output amount is summed in block 13 *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:



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.

May 2010 Age Salary Travel

allowance Commission

Taxable portion of

travel allowance

Taxable value of company

car

Taxable portion of

medical aid

Pension fund deduction

PAYE/SDL

remuneration

UIF remuneration

PAYE

deduction

Oliver 33 R 5 820.00 R 1 164.00 R 0.00 ? R 0.00 ? ? ? ? ? Stander 45 R 32 011.00 R 8 003.00 R 4 321.00 ? R 0.00 ? ? ? ? ? Novak 22 R 17 461.00 R 0.00 R 0.00 R 0.00 R 0.00 ? ? ? ? ? Oscar 66 R 20 371.00 R 3 667.00 R 2 546.00 ? R 0.00 ? ? ? ? ? Charlie 64 R 6 693.00 R 0.00 R 569.00 R 0.00 ? ? ? ? ? ? Bravo 25 R 6 693.00 n/a n/a n/a n/a n/a n/a ? ? ? Echo 45 R 7 275.00 n/a n/a n/a n/a n/a n/a ? ? ?

Totals R 96 324.00 R 12 834.00 R 7 436.00 R 10

267.20 R 3

728.07 R 2 805.19 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 RATES OF TAX

R R R R

0 — 140 000 18% of every R1

140 001 — 221 000 25 200 + 25% of the amount over 140 000




552 001 and over 160 730 + 40% of the amount over 552 000



2. Both Novak and Oscar receive a 13th cheque. The business ‘smoothes’ the tax on the bonus

throughout the year. 3. 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.

4. Permanent employees contribute 7.50% of their basic salary to the Old Pension Fund (13th

cheques are also pensionable). SA Trading CC contributes to the pension fund on a rand-for-rand basis.

5. Bravo and Echo are part time employees that worked for 25 and 18 hours for the month respectively.

6. Employees are not entitled to housing, cellphone or computer allowances. 7. There are no independent contractors or employees on registered learnerships. 8. Only 80.00% of the travel allowance is taxable 9. Assume a maximum UIF funding salary of R 12 478.00. 10. 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.

11. The staff members have the following number of dependants and medical aid contributions:

Employee No. of

dependants Total monthly contribution paid to

medical aid

Oliver 1 R 698.40

Stander 2 R 3 841.32

Novak 1 R 1 920.71

Oscar 4 R 3 259.36

Charlie 0 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) Complete the table provided in your answer book. Make use of the sliding scale schedule. (b) Complete the abbreviated EMP201 in your answer book.

Note: Show all your calculations



Proposed solution:

(a)

May 2010 Age Salary Travel

allowance Commission

Taxable portion of travel

allowance

Taxable value of company

car

Taxable portion of

medical aid

Pension fund deduction

PAYE/SDL

remuneration

UIF remuneration

PAYE

deduction

Oliver 33 R 5 820.00 R 1 164.00 R 0.00 R 931.20 R 0.00 R 0.00 R 436.50 R 6 314.70 R 6 751.20 R 281.65

Stander 45 R 32 011.00 R 8 003.00 R 4 321.00 R 6 402.40 R 0.00 R 2 091.32 R 2 400.83 R 42 424.89 R 12 478.00 R 11 180.62

Novak 22 R 17 461.00 R 0.00 R 0.00 R 0.00 R 0.00 R 580.71 R 1 309.58 R 16 732.13 R 12 478.00 R 2 847.85

Oscar 66 R 20 371.00 R 3 667.00 R 2 546.00 R 2 933.60 R 0.00 R 0.00 R 1 527.83 R 24 322.77 R 12 478.00 R 4 726.31

Charlie 64 R 6 693.00 R 0.00 R 569.00 R 0.00 R 3 728.07 R 133.16 R 501.98 R 10 621.25 R 10 554.23 R 1 056.83

Bravo 25 R 6 693.00 n/a n/a n/a n/a n/a n/a R 6 693.00 R 6 693.00 R 1 673.25

Echo 45 R 7 275.00 n/a n/a n/a n/a n/a n/a R 7 275.00 n/a R 1 818.75

Totals R 96 324.00 R 12 834.00 R 7 436.00 R 10 267.20 R 3 728.07 R 2 805.19 R 6 176.72 R 114 383.74 R 61 432.43 R 23 585.26



Calculations:

1. Calculation of monthly PAYE/SDL and UIF remuneration

Employee Age Monthly salary

(a)

Taxable portion of monthly travel

allowance (60 %)

(b)

Monthly commission

(c)

Monthly value of

company car fringe benefit

(d)

Monthly taxable

portion of medical aid

fringe benefit (e)

Monthly Pension

fund deduction

(f)

PAYE/SDL remuneration (g) = (a) + (b) + (c) + (d) +

(e) - (f)

UIF remuneration

(h) = (g) - (c) + (f) but limited to R 12 478

Oliver 33 R 5 820.00 R 931.20 R 0.00 R 0.00 R 0.00 R 436.50 R 6 314.70 R 6 751.20

Stander 45 R 32 011.00 R 6 402.40 R 4 321.00 R 0.00 R 2 091.32 R 2 400.83 R 42 424.89 R 12 478.00

Novak 22 R 17 461.00 R 0.00 R 0.00 R 0.00 R 580.71 R 1 309.58 R 16 732.13 R 12 478.00

Oscar 66 R 20 371.00 R 2 933.60 R 2 546.00 R 0.00 R 0.00 R 1 527.83 R 24 322.77 R 12 478.00

Charlie 64 R 6 693.00 R 0.00 R 569.00 R 3 728.07 R 133.16 R 501.98 R 10 621.25 R 10 554.23

Bravo 25 R 6 693.00 - - - - - R 6 693.00 R 6 693.00

Echo 45 R 7 275.00 - - - - - R 7 275.00 n/a

Totals R 96 324.00 R 10 267.20 R 7 436.00 R 3 728.07 R 2 805.19 R 6 176.72 R 114 383.74 R 61 432.43

2. Calculation of monthly PAYE deduction

Employee

Monthly PAYE

remuneration (a)

Annual bonus (b)

Pension on annual

bonus (c)

Annual taxable income (d) = (a) + (b) - (c)

Annual PAYE as per the

sliding scale/flat rate

before rebates (e)

Total applicable

rebates (f)

Annual PAYE payable

(g) = (e) - (f)

Monthly PAYE

deduction (h) = (g)/12

Oliver R 6 314.70 R 0.00 R 0.00 R 75 776.40 R 13 639.75 R 10 260.00 R 3 379.75 R 281.65

Stander R 42 424.89 R 0.00 R 0.00 R 509 098.68 R 144 427.50 R 10 260.00 R 134 167.50 R 11 180.62

Novak R 16 732.13 R 17 461.00 R 1 309.58 R 216 936.98 R 44 434.25 R 10 260.00 R 34 174.25 R 2 847.85

Oscar R 24 322.77 R 20 371.00 R 1 527.83 R 310 716.41 R 72 650.74 R 15 935.00 R 56 715.74 R 4 726.31

Charlie R 10 621.25 R 0.00 R 0.00 R 127 455.00 R 22 941.90 R 10 260.00 R 12 681.90 R 1 056.83

Bravo R 6 693.00 - - R 80 316.00 R 20 079.00 - R 20 079.00 R 1 673.25

Echo R 7 275.00 - - R 87 300.00 R 21 825.00 - R 21 825.00 R 1 818.75

Totals R 114 383.74 R 37 832.00 R 2 837.41 R 1 407 599.47 R 339 998.14 R 56 975.00 R 283 023.14 R 23 585.26



(b)

Name of business:

Elite Traders CC EMP 201

Return for: May 2010

"Extract"

Submission date:

On or before 7 June 2010 For illustrative

purposes only

Payment Details

PAYE

SDL

UIF

R

c

R

c

R

c

Amounts payable

4 R 23 585.26

5 R 1 143.84

6 R 1 228.65

R

c

Control total (4 + 5 + 6 = 7)

7 R 25 957.75



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 SR 5

Employee no. & name

Gross salary

Deductions

Net salary

Employers contributions

UIF PAYE Pension

fund Total/

balance Medical

aid Pension

fund UIF SDL

(324) Andrews 7 872.00 69.34 546.52 386.17 1 002.03 6 869.97 712.92 386.17 69.34 72.91

(325) Burtram 32 674.00 124.78 8 542.03 2 123.81 10 790.62 21 883.38 3 920.88 2123.81 124.78 327.21

(326) Cool 22 545.00 124.78 3 663.09 1 158.43 4 946.30 17 598.70 1 960.42 1158.43 124.78 208.52

(327) Deawalt 24 536.00 124.78 4 365.32 1 351.55 5 841.65 18 694.35 3 326.88 1351.55 124.78 231.93

(328) Nkosi 7 413.00 107.79 637.02 444.08 1 188.89 6 224.11 819.84 444.08 107.79 109.16

(329) Ndlovu 6 832.00 n/a 1 708.00 - 1 708.00 5 124.00 - - n/a 68.32

(330) Pillay 7 426.00 74.26 1 856.50 - 1 930.76 5 495.24 - - 74.26 74.26

109 298.00 625.73 21 318.48 5 464.04 27 408.25 81 889.75 10 740.94 5 464.04 625.73 1 092.31

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)



Proposed solution:

General ledger of SA Trading CC

EMP201 control B7

Date Details Fol. Amount Date Details Fol. Amount

2010 2010

May. 31 Bank CBP5 23 662.25 May. 31 Salaries expense (UIF) SR5 625.73

Salaries expense (PAYE) SR5 21 318.48

UIF contributions SR5 625.73

SDL contributions SR5 1 092.31

23 662.25 23 662.25

Creditors for salaries B8


2010 2010

May. 31 Bank CBP5 81 889.75 May. 31 Salaries expense SR5 81 889.75

Plong Pension Fund B9


2010 2010

May. 31 Bank CBP5 10 928.08 May. 31 Salaries expense SR5 5 464.04

Pension contributions SR5 5 464.04

10 928.08 10 928.08

Fit Health Scheme B10


2010 2010

May. 31 Bank CBP5 10 740.94 May. 31 Medical aid contributions SR5 10 740.94

Salaries expense N8


2010

May. 31 Gross salaries SR5 109 298.00



Medical aid contributions N9


2010

May. 31 Fit Health Scheme SR5 10 740.94

UIF contributions N10


2009

Oct. 31 EMP201 control SR10 625.73

SDL contributions N11


2010

May. 31 EMP201 control SR5 1 092.31

Pension contributions N12


2010

May. 31 Plong Pension Fund SR5 5 464.04

sample assessment summative

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