Question 1
Sales/ gross income 7 520 000
Opening inventory (1250 375)
Purchases (4125300)
Closing inventory 1 385 890
Salaries (1275500)
Contributions to a pension fund (195 200)
Annuity to former employee (52 500)
Restraint of trade
(150 000/4) (37 500)
Learner ship agreement
Entering allowance(40 000X7/12) (23 333)
Doubtful-debt
Add back 2023/ add back previous year doubtful debts: (37 500)
(290 000X20%)X25% (14 500)
Legal expenses in respect of collecting outstanding debtors (12 500)
Legal expenses in respect of collecting outstanding staff loans-not in
the production of income
Import of manufacturing machine;
Cost of machine (75 000X17.75) 1 331 250
Capital allowance on machine Delta(1331 250X40%) (532 500)
Foreign exchange difference; loss (18.55-17.75)X75 000 (60 000)
Machine eco
Cost (483 000X100/115) 420 000
2023 capital allowance (420 000X20%) (84 000)
2024 capital allowance (420 000X20%) (84 000) (80 000)
Tax base 252 000
Proceeds 190 000
Less tax base (252 000)
Capital loss 62 000 (62 000)
Wear and tear on delivery vehicle: (2 350 000/4X8/12) (391 667)
Insurance premium
Current expense(240 000/12X5) (100 000)
Prepayment (240 000/12X7)= 140 000 -
Period is more than 6 months and prepayment is more than R100 000
therefore not deductible
Taxable income before donations 715 515
Donations made= 150 000, allow lessor of actual and 10% of 715 515= (71 552)
71 552, therefor allow 71 552 643 964
Taxable income
Sales/ gross income 7 520 000
Opening inventory (1250 375)
Purchases (4125300)
Closing inventory 1 385 890
Salaries (1275500)
Contributions to a pension fund (195 200)
Annuity to former employee (52 500)
Restraint of trade
(150 000/4) (37 500)
Learner ship agreement
Entering allowance(40 000X7/12) (23 333)
Doubtful-debt
Add back 2023/ add back previous year doubtful debts: (37 500)
(290 000X20%)X25% (14 500)
Legal expenses in respect of collecting outstanding debtors (12 500)
Legal expenses in respect of collecting outstanding staff loans-not in
the production of income
Import of manufacturing machine;
Cost of machine (75 000X17.75) 1 331 250
Capital allowance on machine Delta(1331 250X40%) (532 500)
Foreign exchange difference; loss (18.55-17.75)X75 000 (60 000)
Machine eco
Cost (483 000X100/115) 420 000
2023 capital allowance (420 000X20%) (84 000)
2024 capital allowance (420 000X20%) (84 000) (80 000)
Tax base 252 000
Proceeds 190 000
Less tax base (252 000)
Capital loss 62 000 (62 000)
Wear and tear on delivery vehicle: (2 350 000/4X8/12) (391 667)
Insurance premium
Current expense(240 000/12X5) (100 000)
Prepayment (240 000/12X7)= 140 000 -
Period is more than 6 months and prepayment is more than R100 000
therefore not deductible
Taxable income before donations 715 515
Donations made= 150 000, allow lessor of actual and 10% of 715 515= (71 552)
71 552, therefor allow 71 552 643 964
Taxable income
