TAX2601/2025/S2/ Assessment 1 Page 5 of 5 QUESTION 3 (continued) 7. Assets register The following capital assets were acquired or sold during the year: 7.1 A new robotic arm machine used in the manufacturing process and costing R520 000 was purchased and brought into use on 1 April 2022. The machine experienced continuous issues and was eventually sold on 1 July 2024 to another tech company for R350 000. 7.2 Four second-hand laptops, each costing R12 500, were purchased and brought into use on 1 September 2024. 7.3 A delivery vehicle that was purchased and brought into use for an amount of R256 000 on 1 April 2023, was sold to a non-connected person for an amount of R120 000 (an arm’s length price) on 30 September 2024 (Provide a brief reason). 8. Legal fees 8.1 R22 000 to recover unpaid sales invoices from a client. 8.2 R8 000 to defend a director in a personal civil case. The amount was credited to the director’s loan account. (Provide a brief reason). 9. Factory TT purchased part of a newly erected factory building in Sandton to expand its robotic production capabilities. The factory was purchased and brought into use on 15 November 2024 at a cost of R5 500 000. Binding General Ruling: No. 7 allows for the following write off periods for assets (where applicable): • Laptop computers 3 years • Delivery vehicles 4 years REQUIRED MARKS Calculate Titan Tech (Pty) Ltd’s normal tax liability for its 2025 year of assessment. Notes: • Ignore any capital gains tax consequences. • Show amounts that are deductible in terms of different sections of the Income Tax Act in separate lines in the answer. • TT always elects to utilise any available options in terms of the Income Tax Act to legally minimise its normal tax liability. • Provide brief reasons in the body of your calculation (not as a separate note elsewhere in your answer) for the treatment of transactions 3, 7.3, 8.2 36 __________________________________