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Simonsberg ( Pty ) Ltd is a company located in Cape Town that manufactures ladies and kiddies clothing. The following information is available for the

Simonsberg (Pty) Ltd is a company located in Cape Town that manufactures ladies and kiddies clothing.
The following information is available for the year ended 29 February 2024(all amounts exclude VAT unless otherwise
stated):
Income Notes R
Sales 12500000
Interest received 91000
Expenses and costs
Learnership agreement 1?
Purchases of raw materials during the year 3600000
Inventory 2?
Salaries and wages 32960000
Bad debts 4105000
Legal expenses 5150000
Annuity paid to former employee 640000
Broad-based employee share plans 7?
Restraint of trade 8170000
Machinery (including Vat)9575000
Commercial building 103000000
Notes:
1. The company entered into registered learnership agreements (that fulfil all the section 12H criteria) with John and
Kate. John was employed on 1 March 2023 as a learner on a full-time basis, with a level 5 NQF qualification. This
qualification will be required to be completed at the end of two years.
Kate (a disabled person) was registered as a learner on a part-time basis on 1 March 2023, with a level 8 NQF
qualification. In terms of the registered learnership agreement, the learnership will be completed at the end of 12 months.
This was duly achieved.
2. The cost price of the opening stock was R960000 and the market value was R1020000 as on 1 March 2023.
The cost price of the closing stock was R860000 and the market value was R880000 on 29 February
2024.
3. Salaries paid during the current year of assessment amounted to R2800000 and the balance was the companys
contribution towards a provident fund on behalf of its employees.
4. The following bad debts were written off during the current year of assessment:
- Trade debtors (75% of the total bad debts amount)
- Loan to a supplier (25% of the total bad debts amount)
5. Legal expenses were incurred as follows:
- Drafting of a restraint of trade agreement amounting to R15000 for an employee who had resigned to start his own
business.
- The balance of the expenses relate to collection of outstanding trade debtors.
6. The company paid an annuity of R40000 to an ex-employee who retired at 65 years of age during the current year of
assessment.
7. On 3 January 2024, the company granted 2500 shares to 80 of its permanent staff at no consideration. The market
value per share was R6 on the date that the shares were offered and they carry no restrictions. The plan in terms of
which the shares were issued by the company qualifies as a broad-based employee share plan in terms of section 8B.
8. The full payment was made to the former operations manager on 1 December 2023 for agreeing not to start a business
in South Africa within a period of five years.
9. On 2 April 2022, a new manufacturing machine was acquired which was brought into use on 1 June 2022. The
company elects the Section 12C write-off allowance.
10. The company constructed a mini commercial building on 15 July 2023. The building was completed and immediately
brought into use on 1 January 2024.
Required:
Calculate in detail Simonsberg (Pty) Ltd.s taxable income for the year ended 29 February 2024.
Show all workings and full explanations where applicable.

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