A heavy-duty truck, used to deliver goods to customers, was purchased new and brought into use on 1 July 2021 at a cost of R595 000. The truck was in an accident and was scrapped on 1 December 2022. The company received an insurance payout of R280 000. The accountant has shown the cost price of the truck as the wear & tear allowance for the current year, which is incorrect.

Calculate the correct wear & tear allowance for the current year of assessment and any other tax consequences arising from the scrapping of the truck. Ensure you use brackets to indicate amounts that must be deducted and no brackets for amounts that must be added in the taxable income calculation. Note: UC informs you that non-manufacturing assets are written off using the binding general ruling no.7, which allows three (3) years for heavy-duty trucks.