Bece Model Questions Vol1 2024 Business Studies Question 2

ABC Trading Ltd. is preparing to order office supplies for the next quarter. The purchasing officer has prepared the following quotation from the supplier: Item | Quantity | Unit Price (₦) | Discount (%) --- | --- | --- | --- A4 paper (500 sheets) | 10 | 4,500 | 5 Ballpoint pens (12 pcs) | 8 | 2,200 | 0 Staplers | 5 | 3,800 | 10 File folders (A4 size) | 12 | 1,500 | 5 All items are subject to a Value Added Tax (VAT) of 7.5 % on the net amount after discount. The company uses a perpetual inventory system and records purchases in the Purchases Journal. The company also maintains a petty cash fund with a float of ₦5,000. Tasks: a) Calculate the net amount payable to the supplier after discounts and VAT. b) Prepare a correctly formatted purchase order showing the items, quantities, unit prices, discounts, net amounts and total payable. c) Record the purchase transaction in the Purchases Journal, showing the date (15 April 2024), supplier name (OfficeSupplies Co.), and the appropriate debit and credit entries, including the VAT amount. d) Suggest two internal control procedures that could be applied to this purchasing process to minimise the risk of fraud.