LSB2605 ASSIGNMENT 02 ANSWERS DUE 26 SEPTEMBER 2024

Question 2 Buhle uses her savings to set up a small manufacturing business. According to Buhle’s projections, the business will be making a profit in the first year of operation, and during this period, the total remuneration payable to the employees will amount to R450,000. In the second year of operation, the business will make a bigger profit, with the salary bill increasing to R600,000. 2.1.) Is Buhle’s business liable for payment of a skills development levy in the first and second years of operation, respectively? Calculate the total amount due in each year, as applicable, and provide references for where you found the information. (7) 2.2.) Name the two pieces of legislation that regulate this payment. Provide a reference for your answer. (3) TOTAL: [20 Marks] b) Assignment 02 Questions Chill Out (Pty) Ltd is a student restaurant registered as a Small Business Corporation (SBC) that generates an income of R90,000 per month. Every month the food and beverage costs (cost of sales) amount to R20,000 and the company pays R20,000 in wages, R5,000 in rent for the premises, and R2,000 for water and electricity. Assume there are no other costs. 1.) Must Chill Out have a business license to operate? Provide a reference for your answer. (3) 2.) Calculate the business’s gross annual income. (3) 3.) Calculate the business’s annual tax liability if it is registered as a Small Business Corporation, taking account of allowable deductions. Use the SBC tax table below. (7) 4.) Is Chill Out eligible to register for turnover tax? (2) 5.) Calculate the total tax liability for Chill Out if it were registered as a Small Business Corporation using the tax table below. (5) TOTAL: [20 Marks]