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QUESTION 2 (29 marks, 35 minutes) Amanzi Amahle (Pty) Ltd (Amanzi) purifies and packages water. The company is a small business corporation as defined in the Income Tax Act with a 31 March financial year-end. The purification and packaging of water qualify as an approved process of manufacture. Amanzi's bookkeeper was unsure about the effect of certain transactions on the company's taxable income and requested your assistance. The company's net profit (correctly calculated for normal tax purposes) for the 2025 year of assessment was R1 355 000 before taking the following transactions into account: 1. On 1 March 2025 Amanzi received a local dividend of R120 000 from a listed company. 2. The following information relates to trading stock: | | | 01/04/2024 | | 31/03/2025 | | | :--- | :--- | :--- | :--- | :--- | :--- | | | | Cost price | Market value | Cost price | Market value | | 2.1 | Bottled water (finished goods) | R262 000 | R350 000 | R315 000 | R280 000 | | 2.2 | Empty bottles for packaging (raw materials) | Rnil | Rnil | R85 000 | R85 000 | 2.1 The labels on several of the bottles of water included in the closing stock were misprinted, and these bottles will need to be sold below their value. 2.2 In March 2025, Amanzi received a very large shipment of empty bottles. The value was included in this summary, however, the bookkeeper mentioned that packaging material does not form part of closing stock. (Provide a reason) 3. On 1 March 2025 insurance premiums of R252 000 were paid for 6 months in advance. The policy is valid until 31 August 2025. (Provide a reason) 4. Net salaries paid to employees have been deducted from the net profit provided above. Further payments relating to employee remuneration were made as follows: 4.1 Employee's tax paid to SARS.......................................................................R123 000 (Provide a reason) 4.2 Pension fund contributions deducted from employees' salaries and paid to the pension fund .................................................................................R75 000 4.3 Company contributions made to the pension fund .....................................R50 000 5. Amanzi had a Rnil amount to pay as its first provisional tax payment, but paid R35 000 for the second provisional tax payment on 31 March 2025. (Provide a reason) 6. Amanzi has written off the following amounts on 28 February 2019 as bad debts: 6.1 A trade debtor was finally liquidated on 15 March 2025 and owed R25 500 to Amanzi. 6.2 A loan granted to an employee who passed away on 25 October 2024 owed R7 250 to Amanzi. (Provide a reason) 7. Amanzi has entered into a monthly contract with a security company for security services. The monthly cost of R5 750 for March 2025 was not accounted for in the accounting records because the invoice, although dated 1 March 2025, was only received by Amanzi via e-mail on 5 April 2025. (Provide a reason) 8. The following information relates to assets: | | Description | Date purchased and brought into use | Cost | | :--- | :--- | :--- | :--- | | 8.1 | Wrapping machine - second-hand | 15/03/2025 | R425 000 | | 8.2 | Delivery truck - new and unused | 01/11/2022 | R850 000 | QUESTION 2 (continued) REQUIRED: (a) Calculate the taxable income of Amanzi Amahle (Pty) Ltd for its 2025 year of assessment. Notes: - Binding General Ruling No. 7 (if applicable) makes provision for the following write-off periods: - Manufacturing machines - 3 years - Trucks - 4 years - Ignore any capital gains tax consequences. - Show amounts deductible in terms of different sections of the Income Tax Act in separate lines in the answer. - Provide brief reasons for any amount that is not taxable or not deductible. - Also, provide brief reasons in the body of your calculation (not as a separate note elsewhere in your answer) for your treatment of transactions 2.2, 3, 4.1, 5, 6.2 and 7. (25 Marks) (b) Assuming that the taxable income of Amanzi Amahle (Pty) Ltd (correctly calculated) for its 2025 year of assessment amounts to R330 000, calculate the net normal tax due by/or to the company on assessment. (4 Marks) QUESTION 3 (33 marks, 40 minutes)

          QUESTION 2 (29 marks, 35 minutes)

Amanzi Amahle (Pty) Ltd (Amanzi) purifies and packages water. The company is a small business corporation as defined in the Income Tax Act with a 31 March financial year-end. The purification and packaging of water qualify as an approved process of manufacture.

Amanzi's bookkeeper was unsure about the effect of certain transactions on the company's taxable income and requested your assistance. The company's net profit (correctly calculated for normal tax purposes) for the 2025 year of assessment was R1 355 000 before taking the following transactions into account:

1. On 1 March 2025 Amanzi received a local dividend of R120 000 from a listed company.
2. The following information relates to trading stock:

| | | 01/04/2024 | | 31/03/2025 | |
| :--- | :--- | :--- | :--- | :--- | :--- |
| | | Cost price | Market value | Cost price | Market value |
| 2.1 | Bottled water (finished goods) | R262 000 | R350 000 | R315 000 | R280 000 |
| 2.2 | Empty bottles for packaging (raw materials) | Rnil | Rnil | R85 000 | R85 000 |

2.1 The labels on several of the bottles of water included in the closing stock were misprinted, and these bottles will need to be sold below their value.
2.2 In March 2025, Amanzi received a very large shipment of empty bottles. The value was included in this summary, however, the bookkeeper mentioned that packaging material does not form part of closing stock. (Provide a reason)
3. On 1 March 2025 insurance premiums of R252 000 were paid for 6 months in advance. The policy is valid until 31 August 2025. (Provide a reason)
4. Net salaries paid to employees have been deducted from the net profit provided above. Further payments relating to employee remuneration were made as follows:
4.1 Employee's tax paid to SARS.......................................................................R123 000
(Provide a reason)
4.2 Pension fund contributions deducted from employees' salaries and paid to the pension fund .................................................................................R75 000
4.3 Company contributions made to the pension fund .....................................R50 000
5. Amanzi had a Rnil amount to pay as its first provisional tax payment, but paid R35 000 for the second provisional tax payment on 31 March 2025. (Provide a reason)
6. Amanzi has written off the following amounts on 28 February 2019 as bad debts:
6.1 A trade debtor was finally liquidated on 15 March 2025 and owed R25 500 to Amanzi.
6.2 A loan granted to an employee who passed away on 25 October 2024 owed R7 250 to Amanzi. (Provide a reason)
7. Amanzi has entered into a monthly contract with a security company for security services. The monthly cost of R5 750 for March 2025 was not accounted for in the accounting records because the invoice, although dated 1 March 2025, was only received by Amanzi via e-mail on 5 April 2025. (Provide a reason)
8. The following information relates to assets:

| | Description | Date purchased and brought into use | Cost |
| :--- | :--- | :--- | :--- |
| 8.1 | Wrapping machine - second-hand | 15/03/2025 | R425 000 |
| 8.2 | Delivery truck - new and unused | 01/11/2022 | R850 000 |

QUESTION 2 (continued)

REQUIRED:
(a) Calculate the taxable income of Amanzi Amahle (Pty) Ltd for its 2025 year of assessment.
Notes:
- Binding General Ruling No. 7 (if applicable) makes provision for the following write-off periods:
- Manufacturing machines - 3 years
- Trucks - 4 years
- Ignore any capital gains tax consequences.
- Show amounts deductible in terms of different sections of the Income Tax Act in separate lines in the answer.
- Provide brief reasons for any amount that is not taxable or not deductible.
- Also, provide brief reasons in the body of your calculation (not as a separate note elsewhere in your answer) for your treatment of transactions 2.2, 3, 4.1, 5, 6.2 and 7. (25 Marks)

(b) Assuming that the taxable income of Amanzi Amahle (Pty) Ltd (correctly calculated) for its 2025 year of assessment amounts to R330 000, calculate the net normal tax due by/or to the company on assessment. (4 Marks)

QUESTION 3 (33 marks, 40 minutes)

QUESTION 2 (29 marks, 35 minutes)

Amanzi Amahle (Pty) Ltd (Amanzi) purifies and packages water. The company is a small business corporation as defined in the Income Tax Act with a 31 March financial year-end. The purification and packaging of water qualify as an approved process of manufacture.

Amanzi's bookkeeper was unsure about the effect of certain transactions on the company's taxable income and requested your assistance. The company's net profit (correctly calculated for normal tax purposes) for the 2025 year of assessment was R1 355 000 before taking the following transactions into account:

1. On 1 March 2025 Amanzi received a local dividend of R120 000 from a listed company.
2. The following information relates to trading stock:

| | | 01/04/2024 | | 31/03/2025 | |
| :— | :— | :— | :— | :— | :— |
| | | Cost price | Market value | Cost price | Market value |
| 2.1 | Bottled water (finished goods) | R262 000 | R350 000 | R315 000 | R280 000 |
| 2.2 | Empty bottles for packaging (raw materials) | Rnil | Rnil | R85 000 | R85 000 |

2.1 The labels on several of the bottles of water included in the closing stock were misprinted, and these bottles will need to be sold below their value.
2.2 In March 2025, Amanzi received a very large shipment of empty bottles. The value was included in this summary, however, the bookkeeper mentioned that packaging material does not form part of closing stock. (Provide a reason)
3. On 1 March 2025 insurance premiums of R252 000 were paid for 6 months in advance. The policy is valid until 31 August 2025. (Provide a reason)
4. Net salaries paid to employees have been deducted from the net profit provided above. Further payments relating to employee remuneration were made as follows:
4.1 Employee's tax paid to SARS.......................................................................R123 000
(Provide a reason)
4.2 Pension fund contributions deducted from employees' salaries and paid to the pension fund .................................................................................R75 000
4.3 Company contributions made to the pension fund .....................................R50 000
5. Amanzi had a Rnil amount to pay as its first provisional tax payment, but paid R35 000 for the second provisional tax payment on 31 March 2025. (Provide a reason)
6. Amanzi has written off the following amounts on 28 February 2019 as bad debts:
6.1 A trade debtor was finally liquidated on 15 March 2025 and owed R25 500 to Amanzi.
6.2 A loan granted to an employee who passed away on 25 October 2024 owed R7 250 to Amanzi. (Provide a reason)
7. Amanzi has entered into a monthly contract with a security company for security services. The monthly cost of R5 750 for March 2025 was not accounted for in the accounting records because the invoice, although dated 1 March 2025, was only received by Amanzi via e-mail on 5 April 2025. (Provide a reason)
8. The following information relates to assets:

| | Description | Date purchased and brought into use | Cost |
| :— | :— | :— | :— |
| 8.1 | Wrapping machine - second-hand | 15/03/2025 | R425 000 |
| 8.2 | Delivery truck - new and unused | 01/11/2022 | R850 000 |

QUESTION 2 (continued)

REQUIRED:
(a) Calculate the taxable income of Amanzi Amahle (Pty) Ltd for its 2025 year of assessment.
Notes:
- Binding General Ruling No. 7 (if applicable) makes provision for the following write-off periods:
- Manufacturing machines - 3 years
- Trucks - 4 years
- Ignore any capital gains tax consequences.
- Show amounts deductible in terms of different sections of the Income Tax Act in separate lines in the answer.
- Provide brief reasons for any amount that is not taxable or not deductible.
- Also, provide brief reasons in the body of your calculation (not as a separate note elsewhere in your answer) for your treatment of transactions 2.2, 3, 4.1, 5, 6.2 and 7. (25 Marks)

(b) Assuming that the taxable income of Amanzi Amahle (Pty) Ltd (correctly calculated) for its 2025 year of assessment amounts to R330 000, calculate the net normal tax due by/or to the company on assessment. (4 Marks)

QUESTION 3 (33 marks, 40 minutes)

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