Question
Khato Civics ( Pty ) Ltd is a multinational company specializing in construction of big projects including dams and water reticulation projects. The following information
Khato Civics ( Pty ) Ltd is a multinational company specializing in construction of big projects including dams and water reticulation projects. The following information relates to capital transactions for Khato Civics (Pty) Ltd for the year ended 31st December 2020.
Non-current / Fixed Assets Opening Balances
P P
Cost Allowances Granted to Date
Furniture and Fittings 1,090,000 986,000
PPE (Heavy Plant Machinery) 10,000,000 5, 700,000
Manager’s car 320,000 75,430
Delivery Trucks 6,240, 000 782,000
CEO’s car 859,000 78,500
Industrial Building - Workshop 20,280,000 12, 027,000
Additions
P
Other Plant and Machinery 890,000
Computer equipment 309, 000
Improvements to Industrial Building 2,560,000
Disposals
P
Heavy Plant and Machinery (Cost 1,540, 000, TWDV 690 000) 988, 000
Furniture 98,000
Furniture disposed of had a cost value of P 188, 000 and the capital allowances granted to date were P88 000.
Computer equipment costing P123, 000 acquired during the year was disposed of for P135, 000.
Required
(i) Calculate the capital allowances for the year ended 31st December 2020 clearly showing the tax written down values carried forward (C/F).
(ii) Calculate the balancing charge or balancing allowance on the disposal of the non-current assets.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
1 Capital Allowances Furniture and fixture 986000 986000 x 125 123250 PPE Pla...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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