TAX3701/2023 / Semester 2
Assignment 2
Due : 18 September 2023
QUESTION 1 (40 Marks)
Tirisano (Pty) Ltd (“Tirisano”) is a South African resident company that specialises in
the production of aluminium. The aluminium is sold mainly to aluminium window and
door frame manufacturers as well other aluminium products manufacturers. The
company is registered as a category B vendor for Value-Added Tax (VAT) purposes.
1 | Page
, TAX3701/2023 / Semester 2
To calculate the normal tax liability of Tirisano (Pty) Ltd for the year of assessment ending on 31
March 2023, we will start with the profit before tax amount of R4,103,270 and then make
adjustments based on the provided information.
1. Cost of Sales Adjustment:
Include the opening inventory at market value: R540,000
Exclude the closing inventory at market value: -R530,000
Adjusted Cost of Sales = R1,310,000 + R540,000 - R530,000 = R1,320,000
Please find More Answers and Guides on Page 7
The company makes only taxable supplies. The South African Revenue Service (SARS)
considers Tirisano’s manufacturing process as an approved process of manufacture.
Tirisano is not a Small Business Corporation as defined and its financial year ends on 31
March every year.
All amounts exclude VAT, unless stated otherwise.
The profit before tax for the financial year ended 31 March 2023 amounted to R4 103
270, before considering the following information:
1. Cost of sales:
The cost of sales amount taken into account in calculating the profit before tax figure
above, was determined as follows:
R
Opening inventory @ cost 480 000
Purchases 1 450 000
Closing inventory @cost (620 000)
Cost of sales 1 310 000
The following information relating to trading stock was not considered in the calculation
of the cost of sales above:
R
Opening inventory @Market value 540 000
Closing inventory @Market Value 530 000
2 | Page
Assignment 2
Due : 18 September 2023
QUESTION 1 (40 Marks)
Tirisano (Pty) Ltd (“Tirisano”) is a South African resident company that specialises in
the production of aluminium. The aluminium is sold mainly to aluminium window and
door frame manufacturers as well other aluminium products manufacturers. The
company is registered as a category B vendor for Value-Added Tax (VAT) purposes.
1 | Page
, TAX3701/2023 / Semester 2
To calculate the normal tax liability of Tirisano (Pty) Ltd for the year of assessment ending on 31
March 2023, we will start with the profit before tax amount of R4,103,270 and then make
adjustments based on the provided information.
1. Cost of Sales Adjustment:
Include the opening inventory at market value: R540,000
Exclude the closing inventory at market value: -R530,000
Adjusted Cost of Sales = R1,310,000 + R540,000 - R530,000 = R1,320,000
Please find More Answers and Guides on Page 7
The company makes only taxable supplies. The South African Revenue Service (SARS)
considers Tirisano’s manufacturing process as an approved process of manufacture.
Tirisano is not a Small Business Corporation as defined and its financial year ends on 31
March every year.
All amounts exclude VAT, unless stated otherwise.
The profit before tax for the financial year ended 31 March 2023 amounted to R4 103
270, before considering the following information:
1. Cost of sales:
The cost of sales amount taken into account in calculating the profit before tax figure
above, was determined as follows:
R
Opening inventory @ cost 480 000
Purchases 1 450 000
Closing inventory @cost (620 000)
Cost of sales 1 310 000
The following information relating to trading stock was not considered in the calculation
of the cost of sales above:
R
Opening inventory @Market value 540 000
Closing inventory @Market Value 530 000
2 | Page
