Mobius Ltd, during the year ended 31 Mar 2021, constructed a building or us in its trade of manufacturing. The building was completed and put in use Mar 2021. The company incurred the following related costs: Land Building Materials 100,000,000 50,000,000 Manufacturing Machinery Placed in Building 20,000,000 Calculate total industrial building allowance for the 2020/21 year of

Mobius Ltd, during the year ended 31 Mar 2021, constructed a building or us in its trade of manufacturing. The building was completed and put in use Mar 2021. The company incurred the following related costs: Land Building Materials 100,000,000 50,000,000 Manufacturing Machinery Placed in Building 20,000,000 Calculate total industrial building allowance for the 2020/21 year of

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 29P

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You have been presented with the following separate scenarios for the year ended 31 May 2020.Scenario 1During the financial year ending 31 May 2020 Mkhize Ltd manufactured a machine for its own use. Costs incurred are summarised as follows: Direct materials R 4 500 000 Direct labour R3 250 000 Production overheads 75% of labour cost.The machine was completed and put into use on 1 December 2019. All machines are depreciated at a rate of 15% per annum on the reducing balance method. Mkhize Ltd applies a 35% mark‐up on cost in determining the selling price of goods.Scenario 2During 2020 the directors of Chana Ltd decided to value its industrial plant to market value. The plant was acquired on 1 June 2015 at a cost of R45 000 000 and had an estimated useful life of 15 years on the date of acquisition. The plant was valued at R41 500 000 on 1 June 2019. Plant is carried using the revaluation method and depreciation is on the straight‐ line basis. Q.4.1 Calculate the depreciation charge…
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