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Tax2601 exam pack
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TABLE OF CONTENTS
NOVEMBER 2017
MAY/ JUNE 2017
NOVEMBER 2016
MAY/JUNE 2016
MAY/JUNE 2015
NOVEMBER 2015
MAY/JUNE 2014
NOVEMBER 2014
MAY/JUNE 2013
NOVEMBER 2013
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OCTOBER/NOVEMBER 2017
(Q1)
SMILEY (PTY) LTD
Calculation of taxable income for the year of assessment ending 31 March 2017
R
-Cash sales 375 000
-Credit sales 4 600 000
-Purchases of inventory 2 940 000
-Local dividends (exempt) nil
-Opening inventory (880 000)
-Closing inventory 620 000
-Salaries and wages (480 000)
-Pension fund contributions (48 000)
-Wear and tear: manufacturing machine AB (section 12E, deducted in full) (325 000)
-Delivery vehicle (section 12E, 30% x 70 000) no apportionment (21 000)
-Manufacturing building (section 13(1) erected after 1 January 1989, 5% is used,
5% x 1 700 000) (85 000)
-manufacturing machine BC, claimed in full in 2014 year of assessment (section 12E) nil
-Recoupment on manufacturing machine BC
Proceeds 30 000
Tax value (nil)
Cost 120 000
Accumulated wear and tear (120 000) 30 000
-Bad debts (9 000)
-Doubtful debt allowance, 2016 year of assessment 17 000
-Doubtful debt allowance, 2017 year of assessment (25% x 84 000) (21 000)
-Renewal of trademark (9 000)
-Acquisition of trademark (not allowed as deduction) nil
-Registration of trademark (65 000)
-Legal costs (prohibited, non-trade expenditure) nil
-Advertising costs (2 500)
TAXABLE INCOME BEFORE DONATIONS 756 500
-Donation, 100 000 (section 18A) limited to 10% of 756 500 (75 650) (75 650)
TOTAL TAXABLE INCOME 680 850
Income tax liability = 59 150 + 28% (680 850-550 000)
= 95 788
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