Gerald Bosch $($Gerald$)(65$ years old$)$ is an electrical engineer for a South African construction company$($Quality Building $($Pty$)$ Ltd $($QB$)).$ Gerald does not own any of QBs equity shares. Gerald is married outof community of property to Francette. They have a $24-$year$-$old daughter $($Shani$)$ and a $19-$year$-$old son$($Dan$),$ both full$-$time students at a university and dependant on their parents.Gerald retired on $31$ August $2023,$ after $35$ years employment with QB$.$ Details of Geralds employees taxcalculation, as compiled by Gerald for the period, is as follows:Notes RIncome$/$receipts$/$benefitsLine items $($below: $1$ to $6)$Salary $(6$ months$)6378001.$ Use of a company$-$owned vehicle $($par$.$ reference to be provided$)1126002.$ Subsistence allowance $($par$.$ reference to be provided$)2100003.$ Retirement fund contribution benefit $3420004.$ Installation of solar system at Geralds house $4600005.$ Severance benefit $5100000$Total annual equivalent remuneration $862400$Less: Deductions$6.$ Retirement fund contributions $3(50400)7.$ Medical expenditure $6(20000)$Total annual equivalent balance of remuneration $792000$Notes:$1.$ Use of a company$-$owned vehicleQB provided Gerald with a double cab bakkie that cost R$300000($including VAT$)$ from when it waspurchased on $1$ March $2020.$ Gerald used the bakkie to visit contracting sites and occasionally foremergencies with the electricity supply at these sites, usually after normal working hours. Geraldwas allowed to park the bakkie at his home and kept an accurate logbook for his business travelling,which amounted to $12000$ km out of a total of $15000$ km travelled for the period. Geralds travellingfor business purposes was consistently at $80\%$ or more, which he proved to BQs satisfaction. Heinfrequently used the bakkie for private purposes, except for commuting between his home and forwork$-$related purposes. Gerald did not cover any of the bakkies running expenses $($section referenceto be provided$).(4)2.$ Subsistence allowanceQB paid Gerald R$500$ per day for meals and incidental expenses for each night he spent away fromhome. This amounted to a total of $20$ days, totalling R$10000.$ Gerald spent the full allowance eachday and provided proof of his expenses $($par$.$ reference to be provided$).(3)3.$ Retirement fund contributionsGerald paid R$50400$ and QB paid R$42000($on Geralds behalf$)$ in respect of contributions to aprovident fund during the period of his employment. Gerald also made a once off contribution ofR$90000$ towards a retirement annuity fund, of which QB is not aware. Gerald had a balance ofdisallowed retirement fund contributions of R$38000$ on $28$ February $2023.$Gerald received a lump sum of R$1200000$ from his provident fund on $31$ August $2023.$ He usedR$600000$ of the amount to purchase an annuity that would pay him R$7000$ per month from$30$ September $2023,$ for the rest of his life. Line item $3(1)$Line item $6(4)5$ TAX$3761$Test $2$ September $2024$QUESTION $1($continued$)4.$ Installation of solar system at Geralds houseQB installed a solar system $($not part of its trading stock$)$ at Geralds house, at a cost of R$60000$during August $2023.$ The market value of the installation is R$75000.$ QB did this to recognise Geraldfor his long loyal service to the company. $(3)5.$ Severance benefitBQ paid Gerald R$100000$ as a severance benefit on $31$ August $2023$ when his employment wasterminated. $(2)6.$ Medical expenditureGerald is not a member of a medical aid fund. He incurred qualifying medical expenses in terms ofsection $6$B during August $2023.(3)$REQUIRED: MARKSPart AGerald has approached you, as a tax practitioner, to advise him on the correctness of hiscalculation regarding the total annual equivalent balance of remuneration for the $6-$monthperiod he worked at BQ up to $31$ August $2023.$Address an email to Gerald evaluating each line item $(1$ to $7,$ not per the notenumbers$)$ in his calculation. For each item, provide an explanation on the accuracy ofthe calculation. If applicable, briefly discuss the correct procedure and provide the correctamount$/$figure for each line item. Also indicate, with a reason, if an item is incorrectlyapplied in the calculation of the total annual equivalent balance of remuneration. Do notredo the entire calculation, as marks could be forfeited.Format and layout, $1$ mark each.Your answer should be in the following format:Example: Line item Salary R$637800$Reason$/$s for correct $/$ incorrect items in line item, e$.$g$.$ correct $/$ incorrect amount,calculation. $($The salary amount of R$637800$ forms part of remuneration$)$Brief discussion of the correct procedure together with the correct amount. $($Notapplicable for salary$)$Line item $1$ Use of a company$-$owned vehicle etc.Note: Support the transactions with references to the relevant sections$/$paragraphs of theIncome Tax Act No$.58$ of $1962,$ only as indicated in the question.