TAX3701
ASSIGNMENT 2 SEMESTER 2 2024
UNIQUE NO.798141
DUE DATE: 13 SEPTEMBER 2024
, TAX3701
Assignment 2 Semester 2 2024
Unique Number: 798141
Due Date: 13 September 2024
Taxation of Business Activities
Question 1
Step 1: Gross Income Calculation
1. Total Sales (excluding VAT) – We don’t know the exact amount of total sales,
but R17,500 relates to export sales. Given the liquidation of the German client,
these sales may not be collectible. Since the client was liquidated in March 2024
(after year-end), the sale still forms part of gross income. We will consider any
provisions for bad debts later.
Gross Income from Sales = R (including R17,500 from exports)
2. Legal Expenses – Legal expenses related to collecting outstanding debtors can
be deducted. However, legal expenses incurred for staff loans are private and
non-deductible.
Legal Expense Deduction = R17,870 (for outstanding debtors)
Step 2: Cost of Sales
To calculate the cost of sales:
Cost of Sales=Opening Stock+Purchases−Closing Stock
We do not have exact figures for opening and closing stock, but assuming this data is
available, we would input the respective values.