Big Life Cinema (BCLC) is an exclusive movie theatre in Pretoria. You are the accountant for the registered VAT vendor.
In the month of October 2014, BCLC decided to run a promotion campaign on a daily basis. BCLC will give free gifts (freebies) in the form of snacks and soda to movie theatre-goers, based on the number of pre-booked tickets sold per day for every movie. For example, Thirty (30) tickets sold for the movie, Tsotsi, for 10 October 2014 will entitle all theatre-goers with pre-booked Tsotsi tickets for 10 October 2014, to a free soda upon their arrival at the theatre.
BCLC feels strongly about supporting locally produced movies. They, therefore, decided to grant 5% trade discount on every pre-booked movie ticket purchased for a locally produced movie to encourage theatergoers to support South African movies.
The manager requested you to complete a spreadsheet to enable them to see what free gifts should be available every evening.
You have the following information at your disposal for 10 October 2014.
a) The Value Added Tax (VAT) percentage is 14% (Refer to cell B12)
b) The markup margin is 23% (Refer to cell B13)
c) The free gifts (freebies) to be handed out every day when a certain range of pre-booked tickets are sold per movie per day.
Number of pre-booked tickets sold
|FROM||TO||Number of pre-booked tickets sold|
|50||69||Chocolate and soda|
|70||100||Chocolate and popcorn|
|101||120||Soda, popcorn and key ring|
d) The movie code includes information indicating whether a movie is locally produced (“LOC”) or internationally
produced (“INT”). Refer to the e) below for more information.
e) The movie codes for all movies shown during the week. The movie code (refer to row 18) is structured as follows:
Characters 1-4 Random Letter
Characters 5-7 “LOC” and “INT”
Characters 8-11 The first four letters of the movie’s title
f) Theatergoers qualify for a 5% trade discount on the total movie ticket price should they pre-book a locally produced movie, whereas internationally produced movies do not qualify for any discount (refer to cell B14).
g) The trade discount including VAT is calculated as a percentage of the total movie ticket price including VAT (refer to row 21).
h) The selling price including VAT, before taking trade discount into account, is R114.00 per ticket. (Refer to cell B15).
i) The number of pre-booked tickets sold per movie per day. (Refer to row 19).
j) The income per movie is calculated by multiplying the number of pre-booked tickets sold per movie with the price per ticket after deducting the trade discount on locally produced movies.
k) The calculation of the cost per movie excluding VAT is based on the income per movie excluding VAT and the mark-up margin. (Refer to row 24).