Mr. Smith Case Study - Accounting and Finance Assignment Help

Assignment Task:

Question 1 

Mr Smith 62 years old, Married with 2 adult children  

? His Salary (retirement funding) is R15 000 .00 Pm. 

? He receives an annual Bonus Equals to 1 months’ Salary. 

? He has no other income. 

? He pays 7.5% towards his pension fund. 

? He pays R250 per month to his retirement annuity. 

? His monthly medical aid contributions are R1200 for both him and his wife (his  employer pays the balance). 

Calculate his Tax due for the current year. Please show all calculations (16) marks 

Question 2 

You have been provided with the following information by Mr Zulu who asks you to  determine his likely tax tax liability at the end of the current year .(He is aged 47,lives in  Jozi ,and is divorced –there were no children ). (20) Marks 

? Retirement funding income earned as a managing director of alpha cosmetics limited R600 000.00 

? Annual performance bonus (non- retirement funding )R300 000 .00 ? Dividends earned on local share portfolio R90 000. 00 

? Interest earned on capital guaranteed investments R20 000 .00 

? Rental income earned on a( bond –free)property owned in cape town R120 000. 00 ? Membership to his pension fund is based on a contribution rate of 7.5% of his  retirement funding income. 

? He owns a retirement annuity on which he contributes R2500per month. ? He belongs to a staff medical aid scheme to which he contributes R800 per months. ? The house in cape town needed for repainting and cost him R20 000.00 ? The rates and service levies for the house in Cape Town are R1200 .00 per month.

Question 3 

Mr and Mrs Jones Got married in 1990 with ANC (without accrual) Mr Jones has  passed away so all his assets needs to be transferred to his estate, This means that  his last tax return may include some Capital Gain on which CTG needs to be paid  .Establish the Value of his assets liable for CGT, given that his assets and the date  of his death were. 

? Family home worth 2.4 million bought 5 years ago for R1.75 million. ? The family holiday home bought 20 years ago for R25 000.00 

? His car worth R140 000.00 

? His furniture and other house hold effects worth R50 000.00 

? A small fishing boat kept at the holiday home worth R65 000.00 ? His insurance policies will pay out R5 million on his death.

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