QUESTION $4$

$(25$

$4\mathrm{.}1$ On I June $2021,$ CD Ltd obtained an exclusive right for a period of $4$ years to sell a particular skincare range in the Gauteng Region. The cost of the right was R$80000$ payable in $4$ instalments?

Discuss the deductibility of the R$80000$ with reference to the General Deduction Formula for the $2023$ year of

assessment.

Marks$)$

$4\mathrm{.}2$ Ben is a sole proprietor of Stationers $4$U$,$ sells stationery in Cape Town. The current financial year ends on $28$ February $2023.$ The following information relates to the business activities:

Profit before tax of R$375875,$ before taking the following information into account:

Bad debts written off consist of the following:

Trade debtors $,R10000$

Loan to employee X R$15000$

Employee $x$ has left the employment and there is no trace of him.

Penalties and interest of $R6000$ paid to SARS relating to late submissions of tax returns.

Legal Fees to the amount of R$40000$ was incurred for the following:

Collection of outstanding trade debtors

R$20000$

Court cases regarding employee claims

R$15000$

Legal Appeal to SARS

R $5000$

Prepaid expenditure:

Deposit of R$15000$ for the purchase of $3$ computers in April $2023.$

Rental of R$45000$ paid for a security system that will be used for the period $1$ March $2023-30$ September $2023.$

Amy, manager of Stationers $4$U$,$ decided to retire early. She was paid R$225000$ over $2$ years.

REQUIRED:

Calculate the taxable income for the $2023$ Year of Assessment after taking into account the deductions?

Marks$)$

ANNEXURE FOR QUESTION $3$

Years of assessment ending on any date between $1$ April $2022$ and $30$ March $2023$:

$\backslash$table$[[$Taxable Income $(R),$Rate of Tax $($R$)],[1-91250,0\%$ of taxable income$],[91251-365000,7\%$ of taxable income above $91250],[365001-550000,19163+21\%$ of taxable income above $365000],[550001$ and above,$58013+28\%$ of the amount