QUESTION TWO [25] 2.1 Beauty Radebe owns a car dealership in Newcastle. During July 2016...
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Accounting
QUESTION TWO [25]
2.1 Beauty Radebe owns a car dealership in Newcastle. During July 2016 a relative of hers needed a motor vehicle but could not afford one. Mrs Radebe agreed to accept ten sheep in exchange for the vehicle. The vehicle had a market value of R20 000 and the ten sheep had a value of R30 000.
2.2. Benjamins hobby is to enter magazine competitions whenever he has spare time. On 25 January 2017, he won a competition including a cash prize of R150 000 which was paid to him three days later.
2.3 Elizabeth has been included in her late grandmothers last will and testament. As per the wishes of her late grandmother, Elizabeth must receive R1 000 000. Elizabeth has decided that she wishes to receive this amount in ten payments of R100 000 for the next ten years. Elizabeth received her first payment of R100 000 on 30 January 2017.
You are required to discuss whether the amounts referred to above (2.1 2.3) constitute gross income in the hands of the respective recipient. Date of accrual/year of assessment must also be mentions.
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