TAX2601 Assignment 2 (COMPLETE GUIDELINE) Semester 1 2025

Exam (elaborations)
TAX2601 Assignment 2 (COMPLETE
GUIDELINE) Semester 1 2025
 Course
 Principles of Taxation (TAX2601)
Institution

 University Of South Africa (Unisa)
 Book
 Fundamentals of South African Income Tax




Started on:
Saturday, 26 April 2025, 9:04 AM
State:
Finished
Completed on:
Saturday, 26 April 2025, 10:26 AM
Time taken:
1 hour 22 mins
Grade:
34.00 out of 40.00 (85%)



Question 1
Complete
Mark 1.00 out of 1.00
[✓]
Ngwenya (Pty) Ltd contributes to a provident fund for the benefit of its employees.
Contributions amounting to R24 000 000 were paid to the fund during the 28 February
2025 year of assessment. How much is deductible for tax purposes by Ngwenya (Pty) Ltd
for the 2025 year of assessment?

 a. R24 000 000
 b. R24 000 000 × 27.5% equals R6 600 000 ✅
 c. R24 000 000 × 20% equals R4 800 000
 d. R24 000 000 × 10% equals R2 400 000

,Question 2
Complete
Mark 1.00 out of 1.00
[✓]
**During the 2025 year of assessment ending 28 February 2025, Ngwenya (Pty) Ltd moved to
new premises. The total cost of this move was R31 000, made up as follows:
-moving of its shop equipment – R16 500
-moving of all its trading stock – R14 500

What is the effect of these expenses to trading stock?**

 a. R14 500 is added to the cost price of the trading stock
 b. R31 000 is added to the cost price of the trading stock
 c. No amount is added to or deducted from the cost price of the trading stock
 d. R14 500 is added to the cost price of the trading stock ✅



Question 3
Complete
Mark 1.00 out of 1.00
[✓]
On 1 February 2022, Ubuntu (Pty) Ltd acquired a new non-manufacturing asset for R280
000. The asset was brought into use immediately. On 30 April 2024 the asset was sold for
R50 000 cash. Calculate any recoupment or scrapping allowance for Ubuntu (Pty) Ltd on
this machine for the 2025 year of assessment ending 28/29 February. Assume Ubuntu (Pty)
Ltd is not a Small Business Corporation, as defined in the Act. In terms of Binding General
Ruling No. 7, an acceptable write-off period for this asset would be three (3) years.

 a. R(200 000) scrapping allowance ✅
 b. R200 000 recoupment
 c. R(113 333) scrapping allowance
 d. R50 000 recoupment



Question 4
Complete
Mark 1.00 out of 1.00
[✓]
Ngwenya (Pty) Ltd manufactures vehicles. During the year of assessment the company
incurred the following costs to manufacture one vehicle:
-Production costs = R2 900 000

, -Testing costs to get the vehicle roadworthy = R93 000
-Delivery truck traffic fine - worn-out windshield wipers = R1 700




Question 4 (continued)
-Transportation costs to the warehouse = R27 000

What is the cost of this trading stock item for valuation purposes?

 a. R3 021 700
 b. R2 993 000
 c. R3 020 000
 d. R2 927 000 ✅



Question 5
Complete
Mark 1.00 out of 1.00
[✓]
Ngwenya (Pty) Ltd experienced a couple of break-ins at the shop. The company acquired a
watchdog for R8 500. The dog food expense for the watchdog of R11 200 were incurred for
the 28 February 2025 year of assessment. The watchdog had to visit the vet during the 2025
year of assessment at a cost of R1 800. What amount can Ngwenya (Pty) Ltd deduct in
terms of the general deduction formula (section 11(a)) with regards to the above costs
incurred for the 2025 year of assessment?

 a. R13 000 ✅
 b. R nil
 c. R19 700
 d. R21 500



Question 6
Complete
Mark 1.00 out of 1.00
[✓]
Ngwenya (Pty) Ltd made a restraint of trade payment of R1 800 000 to a retiring director,
Mr. Msomi, on 1 September 2024. Mr. Msomi was restrained from competing with the
company for four years from the date of the payment. This payment will be included in
Mr. Msomi’s gross income for his 2025 year of assessment. Calculate how much will be
deductible by Ngwenya (Pty) Ltd for the year of assessment ending 28 February 2025.