NB. Country: South Africa

QUESTION 4 (20 Marks) On 1 March 2015 Mohammed Ahmed, who is 25 years of age, started a new business, Candle Light (Pty) Ltd, of producing and selling candles. Candle Light (Pty) Ltd was never obligated to register as a VAT vendor and also did not choose to do so. Candle Light (Pty) Ltd qualified as a micro business and was registered as a micro business with effect from 1 March 2018 The following information is relevant to Candle Light (Pty) Ltd's 2018 year of assessment: R Doubtful debt allowance deducted in 2018 17 500 Candle Light (Pty) Ltd's assessed loss for 2018 was 12345 The following information is relevant to Candle Light (Pty) Ltd's 2019 year of assessment: R Cash receipts (note 1) 405 000 Outstanding debtor (note 2) 20 000 Interest received on bank account 35 000 Dividends received on listed shares 10 250 Rent paid for business premises 60 000 Proceeds with the sale of mixer (note 3) 30 000 Expenses incurred with the purchase of new mixer 45 000 Normal trading expenses incurred 115 000 Notes 1. Included in the cash receipts for the year 2019 is R30 000 received from outstanding debtors as on 29 February 2018 and amounts refunded from suppliers on damaged goods purchased of R22 000. On 20 June 2018, R13 000 of the R405 000 received was also refunded to a customer who bought candles that did not want to light. 2. Party Hire (Pty) Ltd still owed Candle Light (Pty) Ltd R20 000 for candles delivered on 20 February 2019. 3. Candle Light (Pty) Ltd needed a larger mixer to mix the wax for the candles and purchased a new mixer candle Light (Pty) Ltd sold the old mixer and received R30 000. The mixer was wholly used for business purposes. Required: Calculate Candle Light (Pty) Ltd's tumover tax liability for the 2019 year of assessment