TAXABLE INCOME 2,017,600

1 Land- no capital allowances available on land

The building was erected, therefore it is a new and unused
commercila building, therefore it will qualify for s13 quin allowances
The allowance will be claimed at 5% each year and it is not
apportioned.
R1 930 000x5% - 96,500

2 The cost of furniture is below R 7000, therefore it is small asset in

terms of s11e general binding ruling 7. - 5,000
Therefore small asset will be written in full.

3 Annuities to former employees due to ill health is deductible in terms

of s11(m) - 32,400

4 Reverse prior year doubtful debts allowances, s11j

More than 120 at 40% (R2000x40%) 800
Between 60 and 120 days (R10 000x25%) 2500
3300 3,300

Current year allowance

More than 120 at 40% (R1500x40%) 600
Between 60 and 120 days (R12 000x25%) 3000
3600 - 3,600

5 R20 000 debt owing by Employee Sweli Mali is capital in nature since
Ride is not a moneylender. The R20 000 was not included in its
income. -
The interest of R7 200 has been included in its income and is
therefore deductible in the determination of its taxable income as a
bad debt under the provisions of section 11(i) (R20 000x12%x3) - 7,200
Taxable income 1,876,200

6 The donation was made to a qualifying beneficiaries being a PBO,

therefore s18A deduction is available

S18A deduction is limited to 10% of taxable income,

therefore R150 000.

10% of taxable income is R187 620, therefore the full donated

amount is deductible - 150,000

TAXABLE INCOME 1,726,200

Tax liability x 28% 483,336