You are provided with the following transactions for Juice Processors Ltd. for
the six months period ended 31.10.2005:
1. Sales for May was sh.300,000. the sales increased by 5% in June and by 10% in
each of the following months.
2. Purchases for fruits were constant at Sh.120,000 per month. The purchases
were made direct from farmers.
3. The company is registered for VAT and the VAT paid in July to November
was Sh.145,000 after claiming input tax of sh.5,000 that is each month.
Required:
(i) Using the information provided, confirm the correctness of VAT paid. (12
marks)
(ii) What are your recommendations to the management on VAT compliance?
( 3 marks)