Reference no: EM133000760
Thaba (Pty) Ltd, a manufacturer, has the following income and expenses for the year ended 28 February 2021:
Sales- 3,195,128
Interest- 71,325
Dividends received (25 March 2020)- 418,994
Cost of Sales- (679,248)
Salaries & wages- (505,134)
Factory rental- (122,675)
Pension fund and medical aid contributions on behalf of employees- (71,023)
Vehicle costs (excluding wear and tear- (50,215)
Audit fees- (38,844)
Penalty on late submission of tax returns (3,500)
In addition:
i) On 1 March 2020, Thaba completed construction work costing R 308 940. This work was required in terms of the factory lease agreement (between the entity and the lessor) and involved extending the premises. The lease agreement stipulated that the work should cost R 280 000. The lease commenced on 1 September 2019 for a 6-year period
ii) . On 31 January 2019, Thaba purchased computer equipment R 59 870. This equipment was stolen on 1 October 2020 and insurance proceeds of R 14 325 were received. SARS permits a 3 year write off on computer equipment.
iii). Thaba purchased new machines on 25 August 2020 at a cost of R 216 740 to be used in the process of manufacture. These machines were moved to new factory premises on 14 September 2020 at a cost of R 9 184. The machines were brought into use the following day. iv. Thaba paid a monthly annuity of R 3 750 to the spouse of an ex-employee.
v.) Thaba had a list of doubtful debts of R 28 874 made up of (R 16 254 aged less than 60 days, R 8 980 aged 61 to 120 days and R 3 640 aged over 120 days). Cyan does not apply IFRS 9. SARS had allowed a S11(j) allowance of R 2 860 in the previous tax year.
vi.) A delivery vehicle was purchased for R 220 480 on 31 August 2020. SARS permits a 5 year write off on vehicles. vii. Thaba lent two of its employees R 10 600 each to assist them with personal expenses.
viii.) Thaba had an assessed tax loss of R 786 455 carried forward from the previous tax year.
Problem 1: Determine the taxation payable by Thaba Ltd for the year ended 28 February 2021 (ignoring VAT implications)
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