8. Legal expenses incurred:RLegal cost of William case (refer to note 6 above)Legal cost Alvis Plessis case (refer note 7 above)Cost of a restraint of trade agreement in respect of an employee, Christobel Zuma whoresigned on 1 June 2018 to set up her own business. The restraint is for a period of twoyears from the date she resigned.25 00025 00015 0009. Advertising and publicity related costs:RAdvertising on local radio stationBillboard costs37 00050 000Required:Determine the normal tax payable by News Dot Com (Pty) Ltd, if any, in respect of its year of assessment ended 31December 2018. Provide brief adequate reasons for all amounts includedlexcluded. News Dot Com (Pty) Ltd is the biggest daily newspaper in South Africa, with over 300 000 daily sales across all provincesand a readership of more than 6 100 000. It targets readers in and around the major urban centres. These readers arethe economic core of South Africa. News Dot Com (Pty) Ltd distributes most of its newspapers on credit to the retailers.The following information is provided in respect of the News Dot Com (Pty) Ltď's year of assessment ended 31 December2018:1. Sales:RCash sales900 000Credit sales4 200 0002. Interest on debtors' accountsR210 0003. Debts written offR362 5004. The allowance for doubtful debt reflected on the Statement of Financial Position for each of the respective yearsis as follows:R31 December 201731 December 2018650 000920 0005. On 22 December 2018, Michelle Moon, the Chief Executive Officer (CEO) of News Dot Com (Pty) Ltd donatedR32 000 in cash to the Gift of Givers (a registered Public Benefit Organisation (PBO)).6. Employee-related costs:• Wages and salaries• Medical aid funds and pension fund contributed on behalf of the employees• As Vinollia was getting sick and tired of co-editor, William's bossy and arrogant attitude, she decided to call ashareholder meeting and had William removed from his chair by passing a special resolution on 30 July 2018.This was effective immediately. William did not take this very well and instituted legal action against thecompany on the basis of the Employment Equity Act in the CCMA. The company agreed to settle the issue outof court and paid William damages amounting to R350 000. This was duly paid on 31 August 2018.R1 200 000R150 0007. Pretoria High Court Acting Judge ordered the newspaper and journalist Correta Moloi to compensate AlvisPlessis for tamishing his reputation in an October 2013 article headlined 'Frozen – For an Onion'. Alvis Plessis, amarket agent at the Tshwane Fresh Produce Market, claimed News Dot Com (Pty) Ltď's article about a manlocked in a cold storage room for stealing an onion contained lies, was defamatory.News Dot Com (Pty) Ltd wasordered during the year of assessment to pay R1 350 000 in compensation to a Pretoria market agent fordefaming him in an article three years ago.

Income tax: A fee charged on the income of the corporates and individuals by the central government…

Required: Determine the normal tax payable by News Dot Com (Pty) Ltd, if any, in respect of its year of assessment ended a1 December 2018. Provide brief adequate reasons for all amounts included/excluded.

Required: Determine the normal tax payable by News Dot Com (Pty) Ltd, if any, in respect of its year of assessment ended a1 December 2018. Provide brief adequate reasons for all amounts included/excluded.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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