An entity sells a machine for R150 000. Its original cost and base cost was R100 000. The accumulated depreciation on the machine was R30 000. The tax base was R80 000. 80% of a capital gain is included in taxable income. The tax rate is 28%.

Which of the following statements are true:-

i) At the time of the sale, the deferred tax on the machine would have been an asset of R2 800.

ii) R10 000 of the capital gain is not taxed (exempt).

iii) There is a taxable recoupment of R20 000

iv) The capital gain from an accounting and a tax point of view is a non-temporary difference and therefore does not give rise to deferred tax.

Select one:

a. All of the answers are true

b. i and ii only

c. i and ii and iii only

d. iii only