Vodacom VoWiFi 08:43 Done HTAX331-1-Jul-Dec2021-Su... QUESTION 3 (18 marks) Zellie Jellies (Pty) Ltd (Zellie Jellies) manufactures giant jellybean sweets. The company was established on 1 March 2001 after which it commenced its manufacturing operations. On 1 May 2001, Zellie Jellies purchased a candy mixing machine that is used in the manufacturing of the giant jellybean sweets. The mixing machine cost R750 000. On 3 March 2018, Zellie Jellies incurred improvements on the candy mixing machine to add a chocolate mixing section to the existing machine. These improvements amounted to R80 000. On 1 September 2020, Zellie Jellies decided to rather invest in more efficient sweet manufacturing machines, and sold the candy mixing machine for R900 000. The company has a February year end. Required: Indicate, with thorough calculations, disucssions and references to the Act(s), the income tax implications on Zellie Jellies (Pty) Ltd.'s taxable income for the 2021 year of assessment. Assume that the company chooses to use the time-apportionment base cost (TAB) as its valuation date value. (18 marks) Competency Framework Reference: VII-1.1 Understands the taxpayer's tax profile Collects basic information for the analysis of a taxpayer's tax profile regarding - the form of the taxpayer, the taxpayer's residency and liability for tax the exposure to taxation associated with various forms of income (e.g. employment, trade, property, business, capital gain/loss, passive income) VII-2.1 Calculates normal tax (This applies to natural and non-natural persons:) Identifies and determines the components of taxable income. This includes - classification of income from different sources taxable capital gains 10 HTAX331-1-Jul-Dec2021-SA1-SUPP-JM-V3-24012021