QUESTION $2(25$ MARKS$)$ Priority Trading is a South African company that adheres to a financial and tax year$-$end of $28$ February. For the year of assessment ending $28$ February $2025,$ the company reported an operating profit of R$1200000$ and is taxed at $27\%.$ However, this profit was determined before considering several key transactions that need to be considered for income tax purposes. $1.$ Annuities were paid to the following individuals during the current year of assessment: Siyasanga Retired employee R$50000$ Lona Wife of deceased director R$85000$ Jojozi Minor child of deceased employee R$15000$ Mthobeli Ill health retirement R$65000$ Sikhanyiso Disgruntled employee R$22000$ R$2370002.$ Priority Trading secured an insurance policy for its financial director, covering death and illness, with an additional monthly premium of R$1500$ starting from $1$ September $2024.$ The policy was originally taken out in $2013$ and the monthly premium before effecting the change was R$4000.$ The company opted to apply Section $11($w$)($ii$).$ The policy is purely risk$-$based, offering no cash or surrender value prior to maturity or any directors' death. Priority Trading is both the policy owner and beneficiary. $3.$ Priority Trading, which has a February year$-$end, entered into a restraint of trade agreement following the termination of its Legal Director's employment. On $1$ March $2024,$ the company made a payment of R$250000,$ marking the commencement of a sixty$-$month restraint period. This payment is subject to taxation for the employee. $4.$ The audit of the tax records for the assessment year ending $28$ February $2024$ confirmed an assessed loss of R$30000.5.$ During the assessment year, trading debtors amounting to R$25000$ defaulted on their accounts. Despite the implementation of adequate internal controls and legal proceedings, recovery efforts were unsuccessful. Additionally, an employee with outstanding staff debt of R$7500$ defaulted on repayment and absconded$,$ leaving insufficient payments due to them to recover the outstanding balance. $6.$ An office building was originally constructed for R$3000000$ during $2013.$