Cristal Order acquired an asset before 1 October 2001. She sold the asset during the current year of assessment for a price less than the original price. The Market Value on 1 October 2001 was determined. The Proceeds received from the sale of the asset are greater than the Market Value determined on 1 October 2001. The original purchase price of the asset is greater than the Market Value on 1 October 2001. You can assume that there are no allowable costs incurred after 1 October 2001 and that the Purchase price is the only cost incurred prior 1 October 2001. The base cost of the asset is:a.20% of the Proceedsb.The Proceedsc.The Time-Apportionment Base Costd.The market value on 1 October 2001

Jennings bought an asset before 1 October 2001. During current year of assessment, she sold the asset for R500 000. She did not keep an accurate record of the expenditure or the cost of the asset. The Market Value of the asset on 1 October 2001 was R600 000. YOU ARE REQUIRED to determine the base cost of the asset.a.The base cost is limited to the Proceeds of R500 000 because the Proceeds are less than the Market Value.b.R200 000, the base cost is 20% of the (Proceeds less cost incurred after 1 October 2001) plus expenditure incurred after 1 October 2001. This is also known as an anti-avoidance measure.c.The base cost is R600 000, the Market Value of the asset on 1 October 2001. Jennings can use the Market Value even if it creates a loss.d.The base cost is R100 000 which is the Market Value of the asset on 1 October 2001 less Proceeds of R500 000 as the sale of this asset cannot create a loss.

During the current year of assessment Hendrix sold an asset that was acquired before 1 October 2001. The selling price is greater then all the costs incurred on the asset. The Market Value of the asset was determined on 1 October 2001. The Market Value on 1 October 2001 is greater than the Time-Apportionment Base (TAB) cost and 20% of the Proceeds less allowable costs incurred on or after 1 October 2001. The Proceeds are greater than the Market Value of the asset on 1 October 2001. Hendrix can prove all the costs incurred before and after 1 October 2001. The Base Cost of the asset is:a.The Market Value on 1 October 2001b.Time-Apportionment Base (TAB) costc.20% of the Proceeds less allowable costs incurred on or after 1 October 2001.d.The Market Value on 1 October 2001 plus all costs incurred after 1 October 2001.

Question # 6Plant, measured using the cost model, had a carrying amount of Rs.80,000 on 31 December 2002cost Rs.100,000, accumulated depreciation Rs.20,000.All criteria for classification as a non-current asset held for sale were met on 1 January 2003The following values were established on this dateFair value C70 000 Costs to sell C5 000Required:Show the journal entries relating to the reclassification of the plant assuming that:a. On 30 June 2003 (6-months later) the fair value is Rs.60,000 and expected costs to sellwas Rs.3,000b. On 30 June 2003 (6-months later) the fair value is Rs.70,000 and expected costs to sellwas Rs.2,000

During the current year of assessment Daniella sold an asset that was acquired before 1 October 2001. The selling price is greater than all the costs incurred on the asset. The Market Value of the asset was determined on 1 October 2001. The Time-Apportionment Base (TAB) cost is greater than the Market Value on 1 October 2001 and 20% of the Proceeds less allowable costs incurred on or after 1 October 2001. Daniella can prove all the costs incurred before and after 1 October 2001. The Base Cost of the asset is:a.Time-Apportionment Base (TAB) cost plus all costs incurred after 1 October 2001.b.Time-Apportionment Base (TAB) costc.The Market Value on 1 October 2001d.The Market Value on 1 October 2001 plus all costs incurred after 1 October 2001.

Due to some financial stress, Cindy, aged 45, sold some assets during May-June 2024. All the assets sold were held for Cindy’s personal use and enjoyment, except the shares in companies. The details of the asset sales are as follows: Shares Date of Purchase Cost of Purchase Date of SaleSale ProceedsMotor vehicle14 May 2016 $12,0001 May 2024$8,800Bracelet (jewellery)28 June 2011 $86014 May 2024$4,800Bookcase5 March 2022 $26012 June 2024$180Shares in BPH Ltd10 May 1997 $36,000 19 June 2024$97,000Shares in XYZ Ltd12 July 1985 $14,000 10 May 2024$125,000Which of the following statements is most correct in respect to disregarded capital gains and disregarded capital losses under the CGT regime in respect to Cindy?Question 6Answera.The following are disregarded: (i) motor vehicle (ii) bookcase (iii) BPH Ltd shares and (iv) XYZ Ltd shares.b.The following are disregarded: (i) motor vehicle (ii) bookcase and (iii) XYZ Ltd shares.c.The following are disregarded: (i) motor vehicle (ii) bracelet (iii) bookcase and (iv) XYZ Ltd shares.d.None of the gains and losses are disregarded because they all involved the sale of a CGT asset.