I will leave a thumps up
7 TAX2601 Oct/Nov 2021 QUESTION 3 (25 marks, 30 minutes) Reboni (Pty) Ltd (Reboni) is a company that manufactures hospital and office furniture, with two factories operating in the Eastern Cape and Mpumalanga provinces. The company's year of assessment ends on 28 February 2021 and it is not a small business corporation as defined in the Income Tax Act. On 3 April 2020, Reboni sold its factory in the Eastern Cape. Relevant details of this asset are below: Factory building Purchase date Purchase price Capital allowances claimed until date of sale Selling price 2 May 2012 R3 700 000 R1 665 000 R4 300 000 Improvements to factory building Improvements brought into use date Cost Capital allowances claimed until date of sale 1 October 2019 R450 000 R45 000 Other costs related to the factory Valuation fee obtained for purposes of the sale on 15 March 2020 R12 000 Repairs and maintenance costs over the years (all claimed as deductions R380 000 for income tax purposes) Legal fees paid on 3 April 2020 relating to the sale (not claimed as a R26 000 deduction for income tax purposes) On 20 October 2020, machine HOS1 was destroyed in a fire. Relevant details of this asset are below: Machine HOS1 Purchase date Purchase price Capital allowances claimed until date destroyed Insurance proceeds received 1 June 2020 R700 000 R140 000 R400 000 Other relevant information: Reboni had an assessed capital loss of R83 000 from the previous year of assessment and the section 11(0) scrapping allowance has been elected. REQUIRED: 1. Calculate the recoupment on the sale of the factory. MARKS 6 2. Calculate the adjusted proceeds on the sale of the factory. 2 3. Calculate the base cost on the sale of the factory. 5 4. 1 Calculate the capital gain/loss on the sale of the factory. Calculate the scrapping allowance of Machine HOS1. 5. 6. Calculate the base cost of Machine HOS1. 7 Calculate the capital gain/loss of Machine HOS1. Calculate the taxable capital gain/loss of Reboni (Pty) Ltd for the 2021 year of assessment. 8. 3 [TURN OVER] 7 TAX2601 Oct/Nov 2021 QUESTION 3 (25 marks, 30 minutes) Reboni (Pty) Ltd (Reboni) is a company that manufactures hospital and office furniture, with two factories operating in the Eastern Cape and Mpumalanga provinces. The company's year of assessment ends on 28 February 2021 and it is not a small business corporation as defined in the Income Tax Act. On 3 April 2020, Reboni sold its factory in the Eastern Cape. Relevant details of this asset are below: Factory building Purchase date Purchase price Capital allowances claimed until date of sale Selling price 2 May 2012 R3 700 000 R1 665 000 R4 300 000 Improvements to factory building Improvements brought into use date Cost Capital allowances claimed until date of sale 1 October 2019 R450 000 R45 000 Other costs related to the factory Valuation fee obtained for purposes of the sale on 15 March 2020 R12 000 Repairs and maintenance costs over the years (all claimed as deductions R380 000 for income tax purposes) Legal fees paid on 3 April 2020 relating to the sale (not claimed as a R26 000 deduction for income tax purposes) On 20 October 2020, machine HOS1 was destroyed in a fire. Relevant details of this asset are below: Machine HOS1 Purchase date Purchase price Capital allowances claimed until date destroyed Insurance proceeds received 1 June 2020 R700 000 R140 000 R400 000 Other relevant information: Reboni had an assessed capital loss of R83 000 from the previous year of assessment and the section 11(0) scrapping allowance has been elected. REQUIRED: 1. Calculate the recoupment on the sale of the factory. MARKS 6 2. Calculate the adjusted proceeds on the sale of the factory. 2 3. Calculate the base cost on the sale of the factory. 5 4. 1 Calculate the capital gain/loss on the sale of the factory. Calculate the scrapping allowance of Machine HOS1. 5. 6. Calculate the base cost of Machine HOS1. 7 Calculate the capital gain/loss of Machine HOS1. Calculate the taxable capital gain/loss of Reboni (Pty) Ltd for the 2021 year of assessment. 8. 3 [TURN OVER]
