T
,AX3701 Assignment 2 (COMPLETE ANSWERS)
Semester 1 2025 - DUE 17 April 2025; 100%
TRUSTED Complete, trusted solutions and
MULTIPE CHOICE,ASSURED EXCELLENCE
QUESTION 1 (30 marks, 54 minutes) Lucky Dlamini Steel (Pty)
Ltd (LDS) manufactures a wide variety of steel products for the
building industry in South Africa. LDS is a small business
corporation as defined in the Income Tax Act. LDS’s financial
year ends on 28 February 2025 and the company is also a
registered VAT vendor. LDS only makes taxable supplies and
have all the valid tax invoices in support of expenses incurred
and payments made. The accountant provides you with the
following information for the two-month VAT period ending on
28 February 2025. All amounts stated excludes VAT, unless
specifically stated otherwise: INCOME/RECEIPTS NOTE
AMOUNT R Sales to South African customers 1 Sales to
customers in Germany 85 000 Receipt from Naidoo Attorneys 2
18 975 Interest received on investments 5 780 Insurance
payment received 3 189 750 Rent received 4 75 500
EXPENSES/PAYMENTS MADE Bank charges 3 790 Interest paid
to AZN Bank 9 820 Steel sheets purchases for South African
suppliers 5 950 350 New single cab bakkie purchased from a
registered VAT vendor 6 425 500 Steel cutting machine
purchased 7 95 000 A new coffee machine purchased for the
canteen 25 750 Steel products imported from Italy 8 275 350
,Electricity 100 851 Legal fees 2 2 250 Salaries and wages 352
500 Membership fees 9 16 675 Notes 1. Included in the amount
of the sales to South African customers is an amount of R13 200
for sales made to Mr. D. Moto on 15 January 2025. Mr. D. Moto
was finally sequestrated on 25 February 2025 in the Pretoria
High Court. 2. The receipt of R18 985 from Naidoo Attorneys
relates to an amount that was written off as a bad debt on 20
February 2024 for a sale to Peter Odinga Manufacturing (Pty)
Ltd during the 2024 year of assessment. This amount includes
VAT. The legal fees paid of R2 250 relates to the collection of the
bad debt previously written off. 3. LDS received an amount of
R189 750 on 21 February 2025 from its insurance company. The
amount received represents a claim for the following: • R171
250 for a damaged steel cutting machine used in the
manufacturing process. • R18 500 for a damaged coffee
machine used by staff members in their canteen. 4. The rent
received of R75 500 is for rental income from DCT Consulting
(Pty) Ltd renting vacant office space from LDS. 5. Included in the
purchases amount of R950 350 is an amount of R15 250 that
was identified as damaged goods on delivery to the factory
building of LDS on 17 February 2025. The supplier has issued
the necessary tax credit note on 22 February 2025 for LDS. 6. A
new single cap bakkie was purchased on 1 February 2025 for an
amount of R425 500 (including VAT). The bakkie was provided
as a company vehicle to Mr. D Matebula, the marketing
, manager of LDS, on 1 February 2025. Mr. Matebula makes not
contribution to the cost of the bakkie. 7. A second-hand cutting
machine was purchased from a non-vendor on 2 January 2025
for R95 000. LDS paid R50 000 of the purchase price on 15
January 2025 and the balance of R40 000 on 3 March 2025. 8.
LDS purchased special steel plates from an Italian supplier for
R275 350 on 17 January 2025. LDS also had to pay import
surcharges of R15 180 on 19 January 2025 before the goods
were released from customs in Durban. 9. LDS paid the
following membership fees (including VAT) on 1 February 2025:
• R10 350 to the Engineering Society of South Africa for the
membership fees of the three mechanical engineers involved in
the manufacturing of the steel products at LDS. • R6 325 to the
local golf club for the membership fees of the managing
director of LDS. REQUIRED: MARKS Calculate the VAT payable
by/refundable to Lucky Dlamini Steel (Pty) Ltd for the two-
month VAT period 28 February 2025. Please provide a reason
should any amount not be subject to output tax or does not
qualify for an input tax deduction. 30 QUESTION 2 (40 marks, 72
minutes) Lucky Dlamini Steel (Pty) Ltd (LDS) manufactures a
wide variety of steel products for the building industry in South
Africa. LDS is a small business corporation as defined in the
Income Tax Act. LDS’s financial year ends on 28 February 2025
and the company is also a registered VAT vendor. The following
information is made available by the accountant of LDS to
,AX3701 Assignment 2 (COMPLETE ANSWERS)
Semester 1 2025 - DUE 17 April 2025; 100%
TRUSTED Complete, trusted solutions and
MULTIPE CHOICE,ASSURED EXCELLENCE
QUESTION 1 (30 marks, 54 minutes) Lucky Dlamini Steel (Pty)
Ltd (LDS) manufactures a wide variety of steel products for the
building industry in South Africa. LDS is a small business
corporation as defined in the Income Tax Act. LDS’s financial
year ends on 28 February 2025 and the company is also a
registered VAT vendor. LDS only makes taxable supplies and
have all the valid tax invoices in support of expenses incurred
and payments made. The accountant provides you with the
following information for the two-month VAT period ending on
28 February 2025. All amounts stated excludes VAT, unless
specifically stated otherwise: INCOME/RECEIPTS NOTE
AMOUNT R Sales to South African customers 1 Sales to
customers in Germany 85 000 Receipt from Naidoo Attorneys 2
18 975 Interest received on investments 5 780 Insurance
payment received 3 189 750 Rent received 4 75 500
EXPENSES/PAYMENTS MADE Bank charges 3 790 Interest paid
to AZN Bank 9 820 Steel sheets purchases for South African
suppliers 5 950 350 New single cab bakkie purchased from a
registered VAT vendor 6 425 500 Steel cutting machine
purchased 7 95 000 A new coffee machine purchased for the
canteen 25 750 Steel products imported from Italy 8 275 350
,Electricity 100 851 Legal fees 2 2 250 Salaries and wages 352
500 Membership fees 9 16 675 Notes 1. Included in the amount
of the sales to South African customers is an amount of R13 200
for sales made to Mr. D. Moto on 15 January 2025. Mr. D. Moto
was finally sequestrated on 25 February 2025 in the Pretoria
High Court. 2. The receipt of R18 985 from Naidoo Attorneys
relates to an amount that was written off as a bad debt on 20
February 2024 for a sale to Peter Odinga Manufacturing (Pty)
Ltd during the 2024 year of assessment. This amount includes
VAT. The legal fees paid of R2 250 relates to the collection of the
bad debt previously written off. 3. LDS received an amount of
R189 750 on 21 February 2025 from its insurance company. The
amount received represents a claim for the following: • R171
250 for a damaged steel cutting machine used in the
manufacturing process. • R18 500 for a damaged coffee
machine used by staff members in their canteen. 4. The rent
received of R75 500 is for rental income from DCT Consulting
(Pty) Ltd renting vacant office space from LDS. 5. Included in the
purchases amount of R950 350 is an amount of R15 250 that
was identified as damaged goods on delivery to the factory
building of LDS on 17 February 2025. The supplier has issued
the necessary tax credit note on 22 February 2025 for LDS. 6. A
new single cap bakkie was purchased on 1 February 2025 for an
amount of R425 500 (including VAT). The bakkie was provided
as a company vehicle to Mr. D Matebula, the marketing
, manager of LDS, on 1 February 2025. Mr. Matebula makes not
contribution to the cost of the bakkie. 7. A second-hand cutting
machine was purchased from a non-vendor on 2 January 2025
for R95 000. LDS paid R50 000 of the purchase price on 15
January 2025 and the balance of R40 000 on 3 March 2025. 8.
LDS purchased special steel plates from an Italian supplier for
R275 350 on 17 January 2025. LDS also had to pay import
surcharges of R15 180 on 19 January 2025 before the goods
were released from customs in Durban. 9. LDS paid the
following membership fees (including VAT) on 1 February 2025:
• R10 350 to the Engineering Society of South Africa for the
membership fees of the three mechanical engineers involved in
the manufacturing of the steel products at LDS. • R6 325 to the
local golf club for the membership fees of the managing
director of LDS. REQUIRED: MARKS Calculate the VAT payable
by/refundable to Lucky Dlamini Steel (Pty) Ltd for the two-
month VAT period 28 February 2025. Please provide a reason
should any amount not be subject to output tax or does not
qualify for an input tax deduction. 30 QUESTION 2 (40 marks, 72
minutes) Lucky Dlamini Steel (Pty) Ltd (LDS) manufactures a
wide variety of steel products for the building industry in South
Africa. LDS is a small business corporation as defined in the
Income Tax Act. LDS’s financial year ends on 28 February 2025
and the company is also a registered VAT vendor. The following
information is made available by the accountant of LDS to
