Sponex Limited deals in a wide variety of low-price sports goods. Shown
below is a list of transactions for the month of June 2006.
Purchased goods on credit from Marun Shoes of Sh.96,000
Paid freight charges of Sh.2,450 on the shipment of goods
purchased from Manrun Shoes
Upon unpacking the goods from Manrun Shoes, discovered that
some of the shoes were the wrong style. Returned those shoes
which cost Sh.4,000 to Manrun Shoes and received full credit.
Sales made on account to Ripa Sports for Sh.141,000
Paid Sh.2,200 freight charges on the shipment to Ripa Sports.
Paid Marun Shoes in full
Made credit sales to Holiday Sports for Sh.27,550
Received payment in full from Ripa Sports.
Holiday Sports returned goods worth Sh.6,500
All transactions were subject to Value Added Tax where applicable. The rate
of VAT is 15%.
(a) Sportex Limited Value Added Tax Account for June 2006
( 10 marks)
(b) If the amount calculated above is not paid on time, what penalties will be
imposed? ( 5 marks)