Compute the VAT payable

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Problem - A VAT-registered taxpayer is also engaged in VAT-exempt transactions. The following VAT exclusive data are made available:

Domestic VAT-subject cash sales P1,000,000

VAT-exempt sales on account 500,000

Cash purchases of supplies from VAT supplier (used for all transactions) 100,000

Purchase on account of merchandise from VAT-registered trader (for VAT sales only) 200,000

Required -

a. Prepare the necessary journal entries assuming the taxpayer will use the input tax on zero-rated as input tax credit.

b. Compute the VAT payable assuming the taxpayer will use the input tax on zero-rated sales as input tax credit.

Reference no: EM132855885

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