Khato Civics ( Pty ) Ltd is a multinational company specializing in construction of big projects including dams and water reticulation projects. The following information relates to capital transactions for Khato Civics (Pty) Ltd for the year ended 31^st December 2020.

Non-current / Fixed Assets Opening Balances

P P

Cost Allowances Granted to Date

Furniture and Fittings 1,090,000 986,000

PPE (Heavy Plant Machinery) 10,000,000 5, 700,000

Manager’s car 320,000 75,430

Delivery Trucks 6,240, 000 782,000

CEO’s car 859,000 78,500

Industrial Building - Workshop 20,280,000 12, 027,000

Additions

P

Other Plant and Machinery 890,000

Computer equipment 309, 000

Improvements to Industrial Building 2,560,000

Disposals

P

Heavy Plant and Machinery (Cost 1,540, 000, TWDV 690 000) 988, 000

Furniture 98,000

Furniture disposed of had a cost value of P 188, 000 and the capital allowances granted to date were P88 000.

Computer equipment costing P123, 000 acquired during the year was disposed of for P135, 000.

Required

(i) Calculate the capital allowances for the year ended 31^st December 2020 clearly showing the tax written down values carried forward (C/F).

(ii) Calculate the balancing charge or balancing allowance on the disposal of the non-current assets. 

Answer rating: 100% (QA)

1 Capital Allowances Furniture and fixture 986000 986000 x 125 123250 PPE Pla... View the full answer