QUESTION ONE $[30]$

The following are unrelated situations where a taxpayer has received an amount or$,$ there has

been an accrual of an amount, that may constitute gross income.

Bob Cats

Bob Cats carries on the business of a building contractor specialising in the building of shopping

malls. Its financial year ends on the last day of February.

On $31$ January $2023$ it completed the building of an upmarket shopping mall in the North coast. Under

the building contract,

$-70\%$ of the contract price is due and payable on completion of the mall, and

$-30\%$ of the contract price is to be retained as $$retention moneys$$ until a final certificate is

issued by the engineer six months after the completion of the building.

The contract price of the shopping mall is R$10000000.(6)$

Aladonna

Aladonna has a financial year that ends on the last day of February. It is a distinctive ladies boutique.

On $27$ February $2023$ it sold an evening dress to a customer for R$10000.$ Under this contract of sale,

it undertook to deliver the evening dress to the customer one week later, on $5$ March $2023.$ The dress

had cost R$7500.$ The dress was delivered to the customer on $5$ March

$2023.$ The R$10000$ was settled in full on the same day. $(6)$

Jane Doe

Jane Doe invested R$2000000$ in a $6\mathrm{.}5\%$ fixed$-$deposit investment on $1$ February $2023$ with a financial

institution for $12$ months. Under the fixed deposit contract, the investor is entitled to claim payment of

the interest only on the completion of the $12-$month period. $(6)$

Tomato

Tomato carries on a business of tomato farming. Its financial year ends on the last day of February.

In January $2023$ Tomato sold, and delivered, tomatoes to a tomato$-$sauce producer for R$25000.$

The amount due was settled as follows:

$-$ R$15000$ being paid on delivery $($on $29$ January $2023),$ and

$-$ R$10000$ balance being paid six months later $($on $29$ July $2023).(4)$

Moira Stevens

Moira Stevens was employed for a number of years as the late Leonardo De Olive$$s housekeeper.

On the death of Leonardo, Moira Stevens received as a bequest:

$-$ The oven that she had cooked his meals in $($valued at R$8000),$ and

$-$ Cash of R$150000.$

Shortly before he had died, Leonardo had also given Moira the following:

$-$ R$9000$ cash as a holiday bonus, and

$-$ R$6000$ cash as a birthday gift. $(8)$

Required:

Discuss, for each scenario, whether the amounts referred to are gross income in the hands of the

respective recipients. For amounts that have accrued to a taxpayer, the date of accrual must also

be provided.