QUESTION ONE [20] Refer to the six (6) situations below and answer the questions that follow: Roya Salon Roya Salon, the

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QUESTION ONE [20] Refer to the six (6) situations below and
answer the questions that follow: Roya Salon Roya Salon, the local
hairdresser, paid damages to two of his customers. Both are
suffering as a result of his faulty equipment. - Maude was burnt by
a hairdryer, while - Mary suffered an electric shock (3) Workman
Attorneys Workman Attorneys a firm of attorneys, paid compensation
to a client for the maladministration of a family trust account.
(3) Hyper Store Hyper Store remained open on a public holiday. It
was subsequently fined for trading. Mike Singh, its proprietor, was
also fined for contravening price control regulations. (4) Volane
Dry Cleaners CC Compensation was paid to one of his customers by
Volane CC, the owner of a dry-cleaning business, for the loss of
two suits that had been entrusted to his care by this customer. (2)
Stone Construction Limited Ten years ago Stone Construction Limited
erected a block of flats for a client in accordance with the
client’s specifications. The block was completed and handed over to
the client. The contract consideration was settled in full. During
Stone Construction Limited’s 2018 year of assessment the external
walls of the block revealed dampness. It was then discovered that
the walls had not been built according to specifications. Its
client instituted an action against it for damages. It then settled
the damages. (4) Bold Gas Supplies Bold Gas Supplies is involved in
the retailing of gas and petrol lamps. They recently sold a lamp to
Chester under a guarantee. This particular lamp exploded causing
injuries to Chester. He then paid damages to Chester.
Required: In each of the above situations, determine, giving
full reasons, whether the expenditure would be deductible from the
respective taxpayer’s income.