TAX 3701 EXAM MEMOS

QUESTION 1 VAT Payable /refundable VAT Input /(output) Board and Lodging – Mr. Bryan R29 000 X 14/114 (R3561) Board and Lodging – other exempt s12c - Insurance claim received Office cupboard R1200 X 14/114 (R147) Flowers used for decoration R5000 X 14/114 (R614) Laser printer – financial services Long –term insurance exempt - Furniture and Fittings R7800 X 14/114 R958 Vehicle payment R8400 X 14/114 R1032 Purchases – food and cleaning agents R9 200 X14/114 R1130 Fuel zero rated s11(i) (h) R4200 X 0% - Water and electricity R4200 X 14/114 R516 Stationery R750 X 14/114 R92 VAT payable 627 Question 2 Net profit before adjustments R Replacing damaged carpets s11(d) (53600) Painting the factory and office building (28720) Erecting new carports (does not constitute repair) - Replacing the old mesh wire fence (R48300) Machine Rubber R X 100/114= allowance@20% W&T (R308,000) [77000] Tax value R77000 Recoupment=Sp ltd to cost – TV = R320,000 – R77,000 R243,000 Machine fibre (R14.85X£75,000)= Customs 25000 Foundation 39500 RX 40% s12c allowance () computers R/3 X 6/12 s11(e) (27050) Carports R38 900/5x6/12 [3890] Lease premium R150 000/5 X3/12 s 11 (f) (R7500) Rent s 11a in production of income R3800X3 (R11400) Converting admin building into laboratories [65000] Laboratory equipment () Salaries for researchers (R350,000) Learnership agreement s/2 H(2) (A) (R50 000 + R30000) (R80,000 ) Local dividend exempt in full [35000] Members salary not incurred in the production of income [] Dividends Nil Taxable income Tax liability@28%= MAY/JUNE 2011 tax3701 Question 3 Part A Proceeds(15000+-) Base cost () Capital gain Taxable capital gain @66.6%=76590 Cost Allowances[50000*40%] [] Tax value/base cost Recoupment=selling price(ltd to cost) less tax value =[ltd to ]-= Part B Proceeds(49000