TAX3701 ASSIGNMENT 2 SEMESTER 1&2 OF 2021

Calculation of the tax liability of Tega (Pty) Ltd for the year of assessment ended 29 February 2020: Taxable income (given) 3 123 321 Opening inventory @ cost price (lowest) (430 800) Closing inventory @ market value (lowest) 230 900 Learnership agreements Commencement - A Disabled (NQF 8) (R50 000 x 10/12) (41 667) - B Not disabled (NQF 4) (R40 000 x 2/12) (6 667) Completion - A Disabled (NQF 8) R50 000 x 2 (100 000) Bad debts written off (76 000) Bad debts recovered 23 300 Doubtful debts - 2019 (R128 000 x 30% x 40%) 15 360 Doubtful debts - 2020 (R176 000 x 30% x 40% ) (21 120) Research and development Operating research expenses (R211 000 x 150%) (316 500) Administrative staff (1 025 000) Manufacturing machine (R760 000 x 50%) (380 000) Storage Rental - current year R164 000 x 3/12 (41 000) - prepaid R164 000 x 9/12 = R123 000, more than Nil R100 000 and more than 6 months Fixed assets Machine AA – s12C allowance (R460 000 x 100/114 x 20%) (80 702) Delivery vehicle – R s11(e) allowance (R219 700/4) (54 925) Disposal machine BB Cost 430 000 Less: s12C 2017 (R430 000 x 40%) (172 000) s12C 2018 (R430 000 x 20%) (86 000) (86 000) Tax value 172 000 Proceeds on disposal (220 000) Recoupment Machine CC Allowance claimable in following year Nil Donation of computer Donation @ market value 3 500 Less: Tax value (2 000) Recoupment Office block (R550 000 x 55% x 5%) (15 125) Rental (R18 000 x 7) (126 000) Lease premium (R100 000/180 x 7) (3 888) Alternative: (R100 000/15 x 7/12 ) Leasehold improvement (R390 000/175 x 2) (4 457) Alternative: (R390 000/14.583 x 2/12 ) Alternative: (R390 000/14 yrs 7 mnths x 2/12 ) s13(1) building allowance (R410 000 – R390 000 x 5%) (1 000) Sub-total 631 530 This study source was downloaded by f