TAX2601 LATEST EXAM PACK.

TAX2601 LATEST EXAM PACK. Calculation of taxable income for the year of assessment ending 31 March 2017 R Taxable income before additional adjustments 2 486 000 (1) Wear and tear: new crane, manufacturing equipment, section 12E 100% deduction (600 000) -Cost of modifying the brakes of the crane: section 12E, 100% deduction (40 000) -Repairs to main gate and security house (insured losses, prohibited) nil -Recoupment on destroyed crane (calc 1) 20 000 (2) Rent (20 000 x 9) (180 000) -Wear and tear: office building (5% x 4 800 000) (240 000) -Wear and tear: furniture (section 12E) 50% x 80 000 (20 000) (3) Upfront payment 200 000 -Bonus for the sales director (incurred on 10 March) (40 000) (4) Bad debts (128 000) (5) Electricity bill (8 500) (6) Wear and tear: motor vehicles (section 12E) 150 000 x 30% (45 000) -Wear and tear: truck (section 12E) 50% x 210 000 (105 000) -Scraping allowance (section 11o) (calc 2) (25 000) -Taxable capital gain (calc 3) nil (7) Restraint of trade payment: the lower of (115 000/3) or (115 000/2) only the amount Taxable in the hands of the recipient is used (38 333) (8) Sales income 380 000 -Interest on savings account 17 000 (9) Legal expenses: collection of outstanding debts (10 000) Downloaded by: biancakrugerbusiness | Distribution of this document is illegal S - The study-notes marketplace Overcomers tutorials Cell: Email: Overcomers Tutorials : Legal contact (not deductible, capital nature) nil (10) Acquisition of trademark (not deductible) nil -Renewal of beep trademark (15 000) TAXABLE INCOME 1 608 167 Tax liability = 59 150 + 28% () = 355 437 Calculations for Q1 (1) Proceeds 20 000 Less tax value nil Cost 450 000 Accumulated wear and tear (450 000) Recoupment 20 000 (2) Proceeds 80 000 Less tax value (105 000) Cost 210 000 Accumulated wear and tear (50% x 210 000) (105 000) Scraping allowance (25 000) (3) Proceeds 80 000 Base cost (80 000) Cost 210 000 Wear and tear (105 000) Scraping allowance (25 000) Taxable capital gain or loss nil Downloaded by: biancakrugerbusiness | Distribution of this document is illegal S - The study-notes marketplace Overcomers tutorials Cell: Email: Overcomers Tutorials (Q2) VENTILAIR (PTY) LTD Calculation of taxable income for the year of assessment ending 28 February 2017 R -Sales 6 503 400 -Local dividends (exempt) nil -Bad debts recovered 28 000 -Doubtful debt allowance: : 2017 (25% x 244 000) (61 000) -Trading stock: opening balance (687 000) : Purchases (1 485 300) : Closing inventory 854 200 -Salaries and wages (1 620 000) -Insurance: actually incurred (2/12 x 186 000) (31 000) : prepaid (10/12 x 186 000) more than 100 000 and relate to a period more Than 6 months (not deductible) nil -Fine (prohibited) nil -Contributions to pension fund (165 000) -Annuity (120 000) -Wear and tear: manufacturing machine A (section 12C, purchased 2nd hand 20% x (1 000 000 + 23 800) (204 760) -Repairs: manufacturing machine A (49 000) -Wear and tear: manufacturing machine B (section 12C, new) 40% x 1 830 000 (732 000) -Wear and tear: factory building (5% x 9 800 000) (490 000) -Wear and tear: apartments, low cost residential unit, since only the part of the building Was purchased, only 55% of the purchase price will be used (55% x 1 050 000) x 10% (57 750) Downloaded by: biancakrugerbusiness | Distribution of this document is illegal S - The study-notes marketplace Overcomers tutorials Cell: Email: Overcomers Tutorials Taxable income before donations 1 732 790 -Donation, 85 000, limited to 10% of 1 732 790 (173 279) (85 000) TAXABLE INCOME 1 647 790 Tax liability= 28% x 1 647 790 = 461 381 (Q3) PART A (a) Cost (850 000+10 000) 860 000 Accumulated wear and tear (688 000) Tax value 172 000 (b) Proceeds 900 000 Less tax value (172 000) Recoupment 728 000 The recoupment is limited to total accumulated wear and tear, 688 000 Therefore the recoupment is 688 000 (c) Proceeds 900 000 Less recoupment (688 000) Adjusted proceeds 212 000 (d) Cost 860 000 Less accumulated wear and tear (688 000) Base cost 172 000 (e) Adjusted proceeds 212 000 Less base cost (172 000) Capital gain 40 000 Downloaded by: biancakrugerbusiness | Distribution of this document is illegal S - The study-notes marketplace Overcomers tutorials Cell: Email: Overcomers Tutorials (f) Valuation date value 3 800 000 Sales commission 32 000 Valuation cost 8 000 Base cost 3 840 000 (g) Proceeds 4 800 000 Base cost (3 840 000) Capital gain 960 000 (h) Refrigeration equipment 40 000 Commercial building 960 000 Aggregate capital gain 1 000 000 Capital loss brought forward (35 000) Net capital gain 965 000 Taxable capital gain (80% x 965 000) 772 000 PART B (1) b total cash 445 000 Less receipts of capital nature (37 000) Qualifying turnover 408 000 (2) c first interim payment= {1 650 + 2% ()} / 2 = 1 325 (3) d must be paid after 6 months from 1 March 2016 (4) b (5) b (Q4) PART A SECOND PROVISIONAL PAYMENT The second provisional payment is payable on 31 March 2017 Since the taxable income is less than R1 000 000, the estimate of taxable income for the second provisional payment is based on the lower of: