Country X has the following tax regulations in force:

• The tax year is 1 May to 30 April. 

• All corporate profits are taxed at 20%. 

• When calculating corporate taxable income, depreciation of non-current assets cannot be charged against taxable income. 

• Tax depreciation is allowed at the following rates: − buildings at 5% per annum on straight line basis − all other non-current tangible assets are allowed tax depreciation at 25% per annum on a reducing balance basis. No tax allowances are allowed on land or furniture and fittings. FB commenced trading on 1 May 20X5 when it purchased all its non-current assets.

FB’s non-current asset balances were: Cost Carrying value Tax written down value 1 May 20X5 1 May 20X7 1 May 20X7 R R R Land 20,000 20,000 − 

Buildings 80,000 73,600 72,000 

Plant and equipment 21,000 1,000 11,812 

Furniture and fittings 15,000 5,000 − 

FB did not purchase any non-current assets between 1 May 20X5 and 30 April 20X7. 

On 2 May 20X7, FB disposed of all its plant and equipment for R5,000 and purchased new plant and equipment for R30,000. The new plant and equipment qualified for a first year tax allowance of 50%.

FB’s Statement of profit or loss for the year ended 30 April 20X8 R Gross profit 210,000 Administrative expenses (114,000) Gain on disposal of plant and equipment 4,000 Depreciation – furniture and fittings (5,000) Depreciation – buildings (3,200) Depreciation – plant and equipment (6,000) 

Distribution costs (49,000) 

Taxation 3247  ––––––– 36,800 

Finance cost (7,000) ––––––– 

Profit before tax 29,800 –––––––

Calculate FB’s corporate income tax due for the year ended 30 April 20X8.