TAX3701 Assignment 02 : Semester 1
Bahumi (Pty) Ltd: TAXABLE INCOME 28 FEBRUARY 2021
Details/Calculations R
Profit before tax given 1,350,087
1 Sales - no adjustment as part of gross income -
Reverse the cost of sales entry- 1,359,200
Opening stock at cost (lower) (870,000)
Purchases (760,000)
Closing stock at market value (lower) 255,800
2 Dividends -reverse accounting entry (45,000)
Dividends -local 45,000
Less Full exemption (45,000)
4 Salaries and wages -no adjustment it’s a s (11)a deduction -
Restraint of trade -reverse accounting entry 200,000
Deduct lesser of ( R200 000/3) or (R200 000/5) (40,000)
5 Learnerships
Employee 1
Annual alowance: R50 000* 12/12 (50,000)
Completion allowance : R50 000*2 (100,000)
Employee 2
Annual allowance : R 40 000*4/12 (13,333)
6 Rental expense : reverse accounting entry 225,000
Current portion : R225 000* 11/15 (165,000)
Prepaid portion : R 225 000-R165 000 = R60 000
Prepaid for 4 months < 6 months
Amount paid R60 000< R100 000 , therefore the expenditure is full deductible (60,000)
Bahumi (Pty) Ltd: TAXABLE INCOME 28 FEBRUARY 2021
Details/Calculations R
Profit before tax given 1,350,087
1 Sales - no adjustment as part of gross income -
Reverse the cost of sales entry- 1,359,200
Opening stock at cost (lower) (870,000)
Purchases (760,000)
Closing stock at market value (lower) 255,800
2 Dividends -reverse accounting entry (45,000)
Dividends -local 45,000
Less Full exemption (45,000)
4 Salaries and wages -no adjustment it’s a s (11)a deduction -
Restraint of trade -reverse accounting entry 200,000
Deduct lesser of ( R200 000/3) or (R200 000/5) (40,000)
5 Learnerships
Employee 1
Annual alowance: R50 000* 12/12 (50,000)
Completion allowance : R50 000*2 (100,000)
Employee 2
Annual allowance : R 40 000*4/12 (13,333)
6 Rental expense : reverse accounting entry 225,000
Current portion : R225 000* 11/15 (165,000)
Prepaid portion : R 225 000-R165 000 = R60 000
Prepaid for 4 months < 6 months
Amount paid R60 000< R100 000 , therefore the expenditure is full deductible (60,000)
