QUESTION 1 (35 Marks) Bonsai (Pty) Ltd is involved in the supply of plants, koi fish, feeding products and other accesso

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QUESTION 1 (35 Marks) Bonsai (Pty) Ltd is involved in the supplyof plants, koi fish, feeding products and other accessories formarine life. The company had the following income and expenses forthe year of assessment: R Sales 10 258 140 Less: Cost of sales (2460 000) Gross profit 7 798 140 The company also had other incomewhich comprised of: R Dividends 1 500 000 Interest income 2 900 0001. Legal expenses of R40 000 were paid to attorneys Kloppers andNkwe:  R5 000 of the fee was for debt collection.  R15 000related to the drawing up of a restraint of trade agreement for anemployee who had resigned to set up his own business.  R20 000related to a dispute when one of Bonsai (Pty) Ltd’s clients suedthe company for supplying inferior products. Kloppers and Nkwe wasunsuccessful in this dispute and was ordered to pay the clientdamages of R55 000 2. Bonsai (Pty) Ltd pays a maintenancecontractor to maintain the four koi ponds on its premises. Themaintenance contractor is paid on an annual basis. On 1 November2020, Bonsai (Pty) Ltd paid the maintenance contractor R90 000 tomaintain the koi ponds from 1 November 2020 to 31 October 2022.This is the only prepaid expense incurred by Bonsai (Pty) Ltd forits 2022 year of assessment. 3. Bonsai (Pty) Ltd paid R750 to GeoffHandyman for repairing an electrical point that was damaged in aheavy storm. 4. Bonsai (Pty) Ltd, entered into an agreement withone of its employees who resigned from employment on 1 March 2020.In terms of this agreement, the ex-employee would not render herservices anywhere in Gauteng for a period of five years commencingon 1 March 2020. In return for not being allowed to render aservice for a period of five years, the company compensated theemployee by awarding her R250 000 on 1 March 2020. 5. The followingbad debts were written off during the year of assessment ended 31January 2022:  Trade debtors (note 1) = 84 000  Loan to supplier(note 2) = 120 000 The following bad debts were written off duringthe previous year of assessment and were recouped during the yearof assessment ended 31 January 2022  Trade debtors = 50 000 Investment in Pyramid Scheme = 50 000 (The liquidators paid 5c foreach rand invested) 5 000. Notes: Note 1 The accounting provision(according to list) for doubtful debts amounted to R190 000 on 31January 2020 (consisting of R150 000 for trade debtors and R40 000for a loan to an employee (Elsie Bent)), and R220 000 on 31 January2022 (consisting of R180 000 for trade debtors and R40 000 for aloan to an employee (Elsie Bent)). Note 2 The loan was granted torelieve the financial difficulties of the supplier. The company isnot in the business of providing loans. 6. On 5 January 2022, thecompany granted 3 000 shares to each and every one of its 90permanent employees at a consideration of R0,50 a share. Theseshares have a nominal value of R1 each. Their market value was R5 ashare on the date that the grants were approved. No restrictionsapply to these shares. The plan in terms of which the shares wereissued by the company qualifies as a broad-based employee shareplan in terms of section 8B. 7. The company paid the followingannuities to former employees:  R45 000 to an ex-employee whoretired due to old age during the current year of assessment  R20000 for the next ten years to the dependants of an ex-employee (whohad died in a motor vehicle accident when delivering toys to aclient). 8. The company entered into registered learnershipagreements with Arnold Muller and Bianca du Plessis. Thelearnership agreements fulfil all the criteria of section 12H. Arnold Muller On 1 October 2020, the company employed Arnold Mulleras a “learner” on a full-time basis, with a level 6 NQFqualification. In terms of the registered learnership agreement,the learnership will be completed after two years.  Bianca duPlessis On 1 July 2020, the company employed Bianca du Plessis (adisabled person as defined in the Employment Equity Act 55 of 1998)as a “learner” on a part-time basis, with a level 7 NQFqualification. In terms of the registered learnership agreement,the learnership will be completed after six months (26 weeks). 9.Trading stock:  Purchases of trading stock of R2 500 000 wereacquired during the year of assessment and the opening stock andclosing stock was R1 340 000 and R1 380 000. 10. Some of the Rawmaterials for manufacturing are imported from Italy. The companypurchased stock for €62 500 on 1 October 2019. The materials weredelivered to the company on the 31st of December 2020. The customsduty value on entering the country was R62 000 and the importduties were R18 000. The purchase of the stock was settled in fullon the 31st of March 2020.  Assume that the sot rates of therelevant dates are as follows: 01 October 2019 €1=R18.70 31 January2020 €1=R20.80 31 March 2020 €1=R10.40 11. The company had anassessed loss of R 240 000 from the 2020 year of assessment 12. Thefollowing donations were made during the current year ofassessment:  Non-public benefit organisation = R120 000  Publicbenefit organisation = R170 000 YOU ARE REQUIRED TO: Calculate thenormal tax liability of Bonsai (Pty) Ltd for its year of assessmentending 31 January 2022.