Chamu (Pty) Ltd's (CPL) financial year ends on 31 December annually. In May 2016, CPL sold...

 

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Chamu (Pty) Ltd's (CPL) financial year ends on 31 December annually. In May 2016, CPL sold one of its properties, Plot 970, Phase 4, for P9, 360,000. You are given the following information: 1. The land was purchased in September 2001 for P480, 000. 2. A building costing P1, 750, 000 was erected thereon in January 2002. 3. Improvements with a total cost of P950, 000 were carried out in June 2006. 4. Capital allowances amounting to P386, 000 had been claimed up to the date of disposal. 5. A new commercial property, Plot 370, Phase 4, was purchased for P1,250,000 in November 2016. 6. Both properties were used in CPL's business and CPL always claims the maximum available reliefs and allowances. Shares 1. In October 2016 Chamu (Pty) Ltd sold its shareholding in Trump (Pty) Ltd for P450, 000. The cost of these shares in July 2003 was P630, 000. 2. In November 2016 the company sold 800 shares of its holding of 1,900 shares in Shona (Pty) Ltd for P1,120, 000. The cost of the holding was made up as following; P. May 2009- 1000 shares 1,200,000 October 2011- 450 shares 460,000 June 2014 - 450 shares 1,430,000 Required: In respect of Chamu (Pty) Ltd for the year ended 31 December 2016: (a) Calculate the disposal gain arising on the sale of Plot 970, Phase 4. (b) Calculate the balancing charge or allowance arising on the sale of Plot 970, Phase 4. (c) Calculate the amount of capital allowance claimable in respect of Plot 370, Phase 4. (d) State the cost of Plot 370, Phase 4 for capital gains tax purposes. (e) Calculate the net disposal gains or losses arising on the sale of shares Chamu (Pty) Ltd's (CPL) financial year ends on 31 December annually. In May 2016, CPL sold one of its properties, Plot 970, Phase 4, for P9, 360,000. You are given the following information: 1. The land was purchased in September 2001 for P480, 000. 2. A building costing P1, 750, 000 was erected thereon in January 2002. 3. Improvements with a total cost of P950, 000 were carried out in June 2006. 4. Capital allowances amounting to P386, 000 had been claimed up to the date of disposal. 5. A new commercial property, Plot 370, Phase 4, was purchased for P1,250,000 in November 2016. 6. Both properties were used in CPL's business and CPL always claims the maximum available reliefs and allowances. Shares 1. In October 2016 Chamu (Pty) Ltd sold its shareholding in Trump (Pty) Ltd for P450, 000. The cost of these shares in July 2003 was P630, 000. 2. In November 2016 the company sold 800 shares of its holding of 1,900 shares in Shona (Pty) Ltd for P1,120, 000. The cost of the holding was made up as following; P. May 2009- 1000 shares 1,200,000 October 2011- 450 shares 460,000 June 2014 - 450 shares 1,430,000 Required: In respect of Chamu (Pty) Ltd for the year ended 31 December 2016: (a) Calculate the disposal gain arising on the sale of Plot 970, Phase 4. (b) Calculate the balancing charge or allowance arising on the sale of Plot 970, Phase 4. (c) Calculate the amount of capital allowance claimable in respect of Plot 370, Phase 4. (d) State the cost of Plot 370, Phase 4 for capital gains tax purposes. (e) Calculate the net disposal gains or losses arising on the sale of shares

Answer rating: 100% (QA)

a Disposal gain Proceeds Capital allowances Cost 9 360 000 38... View the full answer