QUESTION $3(20$ MARKS$)$

Fantastic Modelling Incorporated's accountant provided the following comprehensive financial data to assist with the tax calculations for the assessment year ending $28$ February $2025.$

It can be assumed that all items included in the gross profit are calculated in accordance with tax regulations.

Assume the business does not carry on a process of manufacture.

Abridged Statement of Profit or Loss and other Comprehensive Income:

Gross Profit R$580750$

Other Income R$95200$

Other expenses $($R$412500)$

Additional Information:

$1.$ Provisional tax payments of R$18250$ each were made on $31$ August and $24$ February. Ignore VAT implications.

$2.$ The audit of the tax records for the assessment year ending $28$ February $2024$ confirmed an assessed loss of R$20000.$

$3.$ The company earned interest income of R$42500$ from its bank account, derived from savings and other interest$-$bearing accounts during the financial period. However, the accountant inadvertently omitted this amount from the financial records.

$4.$ Other income includes a transaction on the sale of equipment on $30$ April $2024$ which resulted in a recorded profit of R$10500.$ A capital gain of R$7200$ was recognized as the sale price exceeded the original cost. In accordance with SARS regulations, a recoupment amount of R$8800$ was recorded.

$5.$ The company entered into a twelve$-$month learnership agreement with employees. From $1$ June $2024,$ Andrew with an honour$$s degree was registered$$ while Emma who matriculated in $2023$ was registered on $1$ September $2024.$ Jenkin started on $1$ December $2024$ and contributes significantly with his master's degree. Jenkin and Emma are both disabled.

$6.$ Included in other expenses are the following items:

$-$ Depreciation on assets for the year was reported at R$35750$ in the financial statements. However, for income tax purposes, the wear and tear allowance, which reflects the reduction in asset value, is calculated at R$40500.$

$-$ The total salaries and wages for the period amounted to R$95000,$ encompassing all forms of employee compensation. This total includes base salaries, hourly wages, and additional earnings such as overtime, bonuses, and commissions. The expenses have been classified under other expenses in the accounting records."

$-$ A provision of R$15000$ for doubtful debts was created, whereas no such provision existed in the previous year. SARS allows a deduction of $25\%$ on the total outstanding debtor balance. o Research and Development costs of R$22500$ in respect of designing costs relates to a purchase made on $17$ December $2024.$ The design was registered and brought into use in the same month. Section $11($gC$)$ allows for a $10\%$ allowance for research and development costs.

Required: Calculate the tax liability for the year of assessment ended $28$ February $2025.$ Remember to answer in tabulated format with headings Description $|$ Calculations $|$ Amount.