TAX3701 EXAM PACK.

TAX3701 EXAM PACK. TAX3701 - Taxation Of Business ActivitiesTAX3701 - Taxation Of Business Activities. calculation of VAT payable or refundable of Phepi (Pty) Ltd for the 2 month ending 29 February 2012. Income Cash Sales (R85000X 14/114) (10438.60 ) Credit Sales (R25000 X14/114 ) (3070.18 ) Lay bye sale receipts towards shoes to be purchases (R12500 X14/114 ) Payment received in advance for goods delivered and invoiced on 1 March 2012 – not in current 2 month VAT period(40000x 14/114) (4912 ) Sale of going concern – is a zero rated supply S11(1) (e) nil Expenditure Purchases of raw material (120 000 x14/114 ) 14736.84 Salaries – not carrying on an enterprise nil Purchase of shoe sewing machine – claim input VAT on cash price ignore Finance charges. 13300 Expenses relating to Motor vehicle - input is denied on cost of Motor Vehicle as it is not used for generation of taxable supplies. Deemed supply for the fringe benefit for use of Motor Vehicle by Sales Manager (15.42 ) Calc Determined Value of Motor car excludes VAT and Finance charges R80 000 X 100/114= R70175.44 Value of use: 0.3% x R70175.44 = R210.526 Less : Maintenance cost (85.00) 125.53 VAT Output = R125.53 X14/114 = 15.42 Do not reduce value of fringe benefit with due cost because fuel is zero rated Drawer purchased in 2011 – amount still outstanding for more than 12 months levy VAT output to recover input claimed from SARS PART B 1. Game viewing microbus. Carries more than 7 passengers therefore claim input. R340 000 X = R41 754.39 NB Input is denied for a game viewing vehicle carries less than 7 passengers. 2. Double cab vehicle Is a motor vehicle as defined Input should be denied No capacity was given for the vehicle, so input is denied QUESTION 2 PART A Calculation of Taxable Income of Bricks (Pty) Ltd for the year of assessment ended 31 March 2012 Taxable Income before adjustment Opening stock () Closing stock-inventory is recorded at the lower of cost or net realizable value wear and tear on patent – S11 gC (5% X R18000) (900) Trademark – renewal [8200] Research costs s11D () (R220 000 + R160 000) at 100% (small Business Enterprise s12E applies) Wear and tear : s12E factory x Nil Allowance Machine Z S12 E (140 000) (R15 9600 X 100/114) X 100 % Computer s12E [31200x30%] (9360) Motor cycle : s11 (e) (2000) (R32000/4 ) X3/12 Motor cycle s11 (0) scrapping allowance (30000) Base cost on disposal (32000 – 2000 ) = R30 000 Learnership agreement s12H Normal employee (R30 000 X6/12 ) = (15000 ) Disabled employee (50 000 x6/12 ) = (25000 ) Insurance Premium [4/12x] (50000) Prepaid expense 8 months Prepaid amount = R100 000 doesnot exceed R [] (150 000 X8/12 ) S23 H prohibits deduction of the prepaid amount as : 8 months 6months R100 000 = R100 000 limit Only deduct amount for this year (150 000 x4/12 ) Donation to UNISA public benefit organisation (6000) Taxable Income PART B Calculation of tax Liability of DFecibel cc for the year of assessment ended 29 February 2012 Net Profit before tax