Danny Dan (40 years) operated a satellite installation business as a sole proprietor. On 1 April in the current year of assessment, he decided to enter into a partnership agreement with Jason John (28 years). They agreed to share profits on a 50:50 ratio. The following income and expense items for the current year of assessment relate to the partnership.

Income 930 000

Gross income 915 000

Irrecoverable debts recovered (Note 1) 15 000

Expenses 986 550

Sundry expenses (deductible for tax purposes) 192 450

Sundry expenses (deductible for tax purposes) 192 450

Depreciation (Note 2) 74 300

Salaries:

Danny 225 000

Jason 180 000

Other employees 78 000

Retirement annuity fund:

Danny (Note 3) 26 300

Jason (Note 3) 15 000

Provident fund: Other employees (Note 4) 19 300

Drawings - Danny 14 200

Bad debts (Note 5) 6 000

Profit on sale of office building (Note 6) 100 000

Additional Information:

a) Irrecoverable debts recovered The irrecoverable debts recovered relates to R15 000 for debtors brought into the partnership by Jason

b) Depreciation Delivery vehicle 1: This vehicle was purchased new by Jason John on 30 May 2016 for R150000. Delivery vehicle 2: This vehicle was purchased second hand in cash by the partnership on 1 April of the current year of assessment (2022), when Jason joined, at a cost of R200 000. In terms of Interpretation Note No. 47, delivery vehicles are written off over a four-year period. The second-hand delivery vehicle was purchased from a person who is registered for VAT purposes.

c) Contributions to retirement annuity funds The retirement annuity fund contributions are allowed as a deduction for the partner-ship since they are paid in terms of the partnership agreement

d) Contributions to provident fund The partnership contributes R19 300 on behalf of its employees to a provident fund.

e) Bad debts R2 000 of the bad debts relates to a debtor brought into the partnership by Jason.

f) Profit on the sale of an office building On 1 April of the current year of assessment Danny bought a new office building at a cost of R2 500 000. Due to economic pressures Danny sold the building and made a capital gain of R100 000. The section 13 allowance on the building is calculated at 5% for the year.

g) General All amounts exclude VAT, except where otherwise indicated. The partnership is a registered vendor for VAT purposes

REQUIRED: Calculate the taxable income for Danny Dan for the year of assessment ending February 2022