Computer equipment 6 000 January 2011 4 500 Manufacturing machinery 120 000 May 2010 100 800 Furniture 8 200 September 2009 6 421 3 299 Toyota 30 000 March 2012 40 000 Commercial vehicle 20 000 June 2012 10 000 18 000 Toyota Surf 16 000 September 2012 Included in general expenses are:- $ Audit and accounting fees 2 000 Scholarship fees: Clothing & Textiles 8 000 Interest on loan to acquire industrial building 4 000 Removal of factory stock 2 878 Loss on sale of furniture 3 122 20 000 The company entered into a five year agreement for which it paid a Lumpsum of $12 000 and rentals of $4 000 to Amalgamation Transport Services for the lease of a Mercedez Benz which was used by marketing manager to boost exports of blankets to other countries. For the production of variety of blankets, the company embarked on experiment and research which costed $18 000 and excluded from this amount are the following expenses incurred. $ Advertisement and promotion of blankets in Zambia 6 000 Providing samples of Blankets in Botswana 8 000 Electricity connection fee 6 000 Renewal of business license 2 000 22 000 Required:- State the treatment of the grant awarded to company in the year of assessment. (1 mark) List five advantages that will be enjoyed by the company as an investor in Zimbabwe. (5 marks) Calculate minimum taxable income for Sonnage Investments (Private) Limited for the year 31 December 2012. (22 marks) QUESTION 3
Required: (a)Prepare a livestock reconciliation statement. (9 marks) (b)Compute Mr. Hannaford’s minimum taxable income/(loss) from livestock farming for the year 31 December 2013. (6 marks) (c) Tinashe bought a farm in Shurugwi on 30 September 2012 on which he commenced mixed crop farming on 1 January 2013. The following are the fixed assets acquired/constructed and used on the farm for the year ended 31 December 2013. $ Farm implements 200 000 Tractor 44 000 Combine Harvester 300 000 Borehole and water tank 19 500 Farm workers’ compounds (10 units) 150 000 Farm manager’s house 75 000 Fencing 28 000 Fowl runs 7 800 Tobacco 35 000 Irrigation equipment 69 000 Two passenger motor vehicles 65 000 Tinashe also incurred the following expenses in the assessment year 2013. Stumping and clearing of the land 5 000 Geophysical survey expenses 3 500 Contour ridges 6 000 Required (i)State 3 tax reliefs and concessions that are available to livestock farmers under drought conditions. (3) (ii) Compute the total allowable deductions for Tinashe for the tax year ended 31 December 2013. Maximise the deductions. (7) QUESTION 4 Ruvimbo and Wadzanai are partners in a cattle ranching project on a farm in Marondera. They have been conducting their ranching business in partnership sharing
Grocery Commission Bank Loan 38,000 20,000 109,000 Expenditure Purchases (standard rated) Purchases (zero rated) Bond paper Telephone Advertising Pension Petrol and diesel vehicle servicing Subscriptions vehicle purchases Office rentals and electricity Entertainment Salaries and wages 13,000 9,236 1,300 2,000 1,000 2,000 6,000 1,200 1,300 20,000 1,000 800 500 16,000 Notes Standard rated supplies included supplies of $10,000 made to non-registered operators and the rest were to registered operators. Goods worth $15, 000 broken down as: Grocery $5,000 and Hardware $10, 000 were transferred to the Malawi branch. The company issued debit notes for $2,000 received credit notes for $5,000. These were in respect of supplies made in the previous tax periods. Some company employees were allocated company vehicles for business and private use as below: Engine Capacity Number of employees