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TAX2601 EXAM PACK 2024
,October –November 2014
Question 1
calculation of income taxiliability
Taxable income 5 989 747
Water tank;
-Repairs [20 0000]
-Allowance [s11e][36000/6 ] [6 000]
-New machine AA;
Allowance [s12c]-cost [600 000x40%] [240 000]
-moving cost [15 000x6/48] [2 500]
NB [Moving cost in equal installments each year
Hence apportion]
Machine BB
-Allowance [s12c][250 000x20%] [50 000]
-Recoupment 30 000
=selling price[Limited to cost ]less tax value
=180 000[Limited to 250 000]-150 000
=30 0000
Cost 250 000
Allowances-2013 [50 000]
-2014 [50 000]
TAX VALUE 150 000
-Manufacturing building cc
-Allowance [s13][2 500 000x5%] [125 000]
-building DD [s13 quat ]
, -allowance[5 000 000x55%x8%] [ 220 000 ]
Building EE [S13quin]
-allowance[1 700 000x55%x5%] [46 750]
-Building LL [S13 September]
-Allowance [130 000-10 000]x10% [12000]
-recoupment[10 000limited to 12 000] 10 000
-buildingxx[s13]
-allowance[30 000x1/5x3/12] [1500]
-office furniture
-Allowance[66 000x1/6x2/12] [1833]
-scrap allowance [9167]
Selling price[limited to cost]-tax value
=0[Limited to 66 000]-9167
Tax value beginning year 11 000
Allowance during year [1 833]
Tax value 9167
-heavy duty truck
Allowance[22 500x1/3] [75 000]
-Toolbox
-allowance-small asset in full [2 000]
-rental –photo copy machine [42 000]
Taxable income 4’615’997
Tax liability=4’615’997x28%=
1’292’479’16
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