Perfect Manufacturing Company (Pty) Ltd, a company recognised as an approved manufacturing company for tax purposes, for the year ended 31 March

Income Bwp

Sales 8,390,263

Fair value adjustment 296,224

Rent received 142,896

Interest received 67,382

8,896,765

Expenses

Cost of sales 3,611,805

Salaries and wages 1,960,321

Administrative expenses 874,139

Goodwill written off 200,000

Impairment of investment 375,000

Loss on sale of plant 39,897

Depreciation 489,729

Donations 28,526

Amortization of patent 58,027

Provision for future expenses 176,800

Management fees 350,000

8,164,24

Net profit for the year 732,521

The following additional information is provided:

1. The tax value of the assets at 1 April 2012 is made up as follows:

Furniture Plant Vehicles

Bwp Bwp Bwp

Cost 275,034 2,893,682 1,678,338

Accumulated capital allowances (87,290) (1,652,906) (873,752)

Tax value 1 April 2012 187,744 1,240,776 804,586

2. The loss on sale of plant is calculated:

Bwp

Cost 528,113

Accumulated depreciation (208,216)

319,897

Fair value adjustment 120,000

Sales price (400,000)

Loss on sale 39,897

Capital allowances amounting to P328, 424 had been claimed in respect of the sold plant as at 31

March 2013.

3. Replacement plant was purchased for P822, 600.

4. Management fees are payable to a non-resident. Withholding tax of P26, 250 was paid during the

year.

5. The company made the following tax payments during the year:

Bwp

Self-assessment tax 150,000

Withholding tax on interest received 6,738

Withholding tax on rent received 7,145

Required:

(a) Calculate the taxable income for Perfect Tech Manufacturing Company (Pty) Ltd for the year

ended 31 March 2013. (15 marks)

(b) Calculate the net tax payable by or refundable to Perfect Tech Manufacturing Company (Pty) Ltd

for the year ended 31 March 2013. (3 marks)