Tax3701 – Second Assignment 2024 (Sem 2)
Question 1
The normal income tax liability for Tau Steelworks (Pty) Ltd for the 2024 year of
assessment.
R
Sales 7 250 000
Bad debt nil
(company was liquidated after year end – bad debt will be written
off in the 2025 year of assessment)
Trading stock
Opening stock at market value (1 250 375)
Purchases (4 125 300)
Closing stock @ cost 1 385 890
Employees related expenses
Salaries and wages (1 275 500)
Contributions to pension funds for employees (195 200)
Annuity paid to Mrs Dorcas Mabete (52 500)
Restraint of trade payment
The lesser of
(R150 000 /3) = R50 000
(R150 000/4) = R37 500 (37 500)
Learnership agreement
Annual allowance (R40 000 x 7/12) (23 333)
Doubtful debts allowance
2023 – allowance 37 500
2024 – allowance (R290 000 x 25%) (58 000)
Legal expenses
For collecting outstanding staff loans – (not incurred in production
of income) nil
For collecting outstanding debtors (17 870)
Machine Delta
Cost ($75 000 x R17.75) x 40% (532 500)
Profit/loss on foreign exchange $75 000 x (R17.75 – R18.55) (60 000)
Annual insurance
Current year (R240 000 x 5/12) (100 000)
Prepaid expense – (R240 000 – R100 000) = R140 000 nil
(prepaid amount exceeds R100 000 and relates to a period which is
more than 6 months after year-end.
Machine Eco
Cost (R483 000 x 100/115) R420 000
ACCADEMIC NEEDS CONTACT /0651609781
Question 1
The normal income tax liability for Tau Steelworks (Pty) Ltd for the 2024 year of
assessment.
R
Sales 7 250 000
Bad debt nil
(company was liquidated after year end – bad debt will be written
off in the 2025 year of assessment)
Trading stock
Opening stock at market value (1 250 375)
Purchases (4 125 300)
Closing stock @ cost 1 385 890
Employees related expenses
Salaries and wages (1 275 500)
Contributions to pension funds for employees (195 200)
Annuity paid to Mrs Dorcas Mabete (52 500)
Restraint of trade payment
The lesser of
(R150 000 /3) = R50 000
(R150 000/4) = R37 500 (37 500)
Learnership agreement
Annual allowance (R40 000 x 7/12) (23 333)
Doubtful debts allowance
2023 – allowance 37 500
2024 – allowance (R290 000 x 25%) (58 000)
Legal expenses
For collecting outstanding staff loans – (not incurred in production
of income) nil
For collecting outstanding debtors (17 870)
Machine Delta
Cost ($75 000 x R17.75) x 40% (532 500)
Profit/loss on foreign exchange $75 000 x (R17.75 – R18.55) (60 000)
Annual insurance
Current year (R240 000 x 5/12) (100 000)
Prepaid expense – (R240 000 – R100 000) = R140 000 nil
(prepaid amount exceeds R100 000 and relates to a period which is
more than 6 months after year-end.
Machine Eco
Cost (R483 000 x 100/115) R420 000
ACCADEMIC NEEDS CONTACT /0651609781
