Activity 1
Sunshine Traders
TAX COMPUTATION FOR THE YEAR ENDED 28/02/2014
Taxable income
Sales 10 000 000
Interest 800 000
Receipt of debtors -
Bad debts (100 000)
Doubtful debts - PY - add back 50 000
Doubtful debts - CY - (240 000 x 25%) (60 000)
Disposal of patent
Selling price limited to cost R 120 000
Less tax value R 102 000
Cost R 120 000
Less allowances - Pys (120 000 x 5%)x 2 R 12 000
Less allowances - CY (120 000 x 5%) R 6 000 (6 000)
Recoupment R 18 000 18 000
Purchases (5 050 000)
Opening stock (700 000)
Closing stock 775 000
Lease rentals (10 000 x 3) only when building brought into use (30 000)
Leasehold improvements (950 000/(10x12 - 6))x3 (25 000)
Additional allowance (1 000 000 - 950 000) x 5% (2 500)
Salaries (1 000 000)
Contribution to medical aid (105 000)
Annuities to dependants (15 000)
Repairs - parking lot (50 000)
Additional parking - 25000/5 (5 000)
Sunshine Traders
TAX COMPUTATION FOR THE YEAR ENDED 28/02/2014
Taxable income
Sales 10 000 000
Interest 800 000
Receipt of debtors -
Bad debts (100 000)
Doubtful debts - PY - add back 50 000
Doubtful debts - CY - (240 000 x 25%) (60 000)
Disposal of patent
Selling price limited to cost R 120 000
Less tax value R 102 000
Cost R 120 000
Less allowances - Pys (120 000 x 5%)x 2 R 12 000
Less allowances - CY (120 000 x 5%) R 6 000 (6 000)
Recoupment R 18 000 18 000
Purchases (5 050 000)
Opening stock (700 000)
Closing stock 775 000
Lease rentals (10 000 x 3) only when building brought into use (30 000)
Leasehold improvements (950 000/(10x12 - 6))x3 (25 000)
Additional allowance (1 000 000 - 950 000) x 5% (2 500)
Salaries (1 000 000)
Contribution to medical aid (105 000)
Annuities to dependants (15 000)
Repairs - parking lot (50 000)
Additional parking - 25000/5 (5 000)
