Perfect Manufacturing Company (Pty) Ltd, a company   recognised as an approved manufacturing company for tax purposes, for the year ended 31 March

Income                                            Bwp

Sales                                              8,390,263

Fair value adjustment                     296,224

Rent received                                 142,896

Interest received                              67,382

                                                         8,896,765

Expenses

Cost of sales                                       3,611,805

Salaries and wages                             1,960,321

Administrative expenses                     874,139

Goodwill written off                            200,000

Impairment of investment                     375,000

Loss on sale of plant                             39,897

Depreciation                                           489,729

Donations                                             28,526

Amortization of patent                          58,027

Provision for future expenses                 176,800

Management fees                                350,000

                                                           8,164,24

Net profit for the year                        732,521

The following additional information is provided:

1. The tax value of the assets at 1 April 2012 is made up as follows:

                                                                      Furniture                    Plant                       Vehicles

                                                                        Bwp                          Bwp                          Bwp

Cost                                                              275,034                      2,893,682                 1,678,338

Accumulated capital allowances                  (87,290)                   (1,652,906)               (873,752)

Tax value 1 April 2012                                  187,744                      1,240,776                    804,586

2. The loss on sale of plant is calculated:

                                                                             Bwp

Cost                                                                    528,113

Accumulated depreciation                                (208,216)

                                                                          319,897

Fair value adjustment                                      120,000

Sales price                                                      (400,000)

Loss on sale                                                      39,897

Capital allowances amounting to P328, 424 had been claimed in respect of the sold plant as at 31 March 2013.

3. Replacement plant was purchased for P822, 600.

4. Management fees are payable to a non-resident. Withholding tax of P26, 250 was paid during the year.

5. The company made the following tax payments during the year:

                                                                              Bwp

Self-assessment tax                                             150,000

Withholding tax on interest received                    6,738

Withholding tax on rent received                          7,145

Required:

(a) Calculate the taxable income for Perfect Tech Manufacturing Company (Pty) Ltd for the year ended 31 March 2013.

(b) Calculate the net tax payable by or refundable to Perfect Tech Manufacturing Company (Pty) Ltd for the year ended 31 March 2013.

Answer rating: 100% (QA)

a Taxable income for Perfect Tech Manufacturing Company Pty Ltd for the year ended 31 March 2013 Inc... View the full answer