SA Miller Limited (SA Miller) is a South African resident company with a 30 June financial...

 

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SA Miller Limited (SA Miller) is a South African resident company with a 30 June financial year end. The company is situated in an industrial area in Johannesburg and the main business is the manufacturing and sale of various types of beer. The Commissioner of the South African Revenue Service (SARS) approved the company's manufacturing of beer as a "process of manufacturing". SA Miller is a registered Value-Added Tax vendor and the Commissioner is satisfied that the company makes 100% taxable supplies. The following information was compiled from the company's fixed asset register: Description Date purchased 1. Factory 1 Factory 2 Office building Notes: 2. Delivery vehicle Machine 1 Machine 2 Computer 3. 1 July 2001 1 April 2020 1 May 2018 1 June 2018 28 March 2019 1 April 2020 1 August 2019 Notes 1 1 2 3 4 4 5 Cost Price (VAT excluded) R 750 000 2 500 000 1 700 000 180 000 250 000 320 000 7500 SA Miller erected Factory 1 with the incorporation of the company and brought it into use on 1 July 2001. Factory 1 was used in the process of manufacturing since that date. A fire broke out in the factory on 25 February 2020 and damaged the factory. SA Miller decided to rather sell the factory and replace it with a new factory than to repair it. Factory 1 was sold for R1 250 000 (VAT excluded) on 31 March 2020. Factory 1 was valued at R850 000 on 1 October 2001. If the value is calculated according to the time-apportionment base cost method (TAB method) the value amounts to R781 250. Factory 2 was acquired new on 1 April 2020 to replace Factory 1 and was immediately brought into use in the manufacturing process. The proceeds of Factory 1 were applied in full to settle the amount on Factory 2. The new and unused office building was acquired from Mr Lager, who owns 25% of the issued share capital of SA Miller. The market value of the building amounted to R2 000 000 on this date. The office building is used as the head office of the company and all accounting and administrative services are performed from this office. SA Miller sold a delivery vehicle to a local pre-school for R5 000 on 31 May 2020 when the market value of the vehicle was R30 000. The delivery vehicle was initially acquired when the market value amounted to R150 000. SA Miller Limited (SA Miller) is a South African resident company with a 30 June financial year end. The company is situated in an industrial area in Johannesburg and the main business is the manufacturing and sale of various types of beer. The Commissioner of the South African Revenue Service (SARS) approved the company's manufacturing of beer as a "process of manufacturing". SA Miller is a registered Value-Added Tax vendor and the Commissioner is satisfied that the company makes 100% taxable supplies. The following information was compiled from the company's fixed asset register: Description Date purchased 1. Factory 1 Factory 2 Office building Notes: 2. Delivery vehicle Machine 1 Machine 2 Computer 3. 1 July 2001 1 April 2020 1 May 2018 1 June 2018 28 March 2019 1 April 2020 1 August 2019 Notes 1 1 2 3 4 4 5 Cost Price (VAT excluded) R 750 000 2 500 000 1 700 000 180 000 250 000 320 000 7500 SA Miller erected Factory 1 with the incorporation of the company and brought it into use on 1 July 2001. Factory 1 was used in the process of manufacturing since that date. A fire broke out in the factory on 25 February 2020 and damaged the factory. SA Miller decided to rather sell the factory and replace it with a new factory than to repair it. Factory 1 was sold for R1 250 000 (VAT excluded) on 31 March 2020. Factory 1 was valued at R850 000 on 1 October 2001. If the value is calculated according to the time-apportionment base cost method (TAB method) the value amounts to R781 250. Factory 2 was acquired new on 1 April 2020 to replace Factory 1 and was immediately brought into use in the manufacturing process. The proceeds of Factory 1 were applied in full to settle the amount on Factory 2. The new and unused office building was acquired from Mr Lager, who owns 25% of the issued share capital of SA Miller. The market value of the building amounted to R2 000 000 on this date. The office building is used as the head office of the company and all accounting and administrative services are performed from this office. SA Miller sold a delivery vehicle to a local pre-school for R5 000 on 31 May 2020 when the market value of the vehicle was R30 000. The delivery vehicle was initially acquired when the market value amounted to R150 000.

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1 Calculate the amount of capital allowances claimed by SA Miller for Factory 1 Factory 2 the office building delivery vehicle and Machine 1 for the year ending ... View the full answer