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On 1 March 2020, the companyentered into a lease agreementin order to lease a manufacturing machine with a cost price of 250000 (VAT inclusive). The period of the lease is five years, and the useful life of the machineryis estimated at six years. The following is an extractfrom the lease agreement: 4.1.1 Ownership of the machinerywill be transferred to the Lessee at the end of the lease. 4.1.2 Should the Lessee cancel the lease, the Lessor's losseswill be borne by the Lessee. Monthly instalments are payable in arrears and amount to R5 947 (VAT inclusive). The company used the manufacturing machine for a qualifying purpose. The companyis a registered VAT vendor. Required: Provide the deferred tax movement per the balancesheetmethod for the lease agreement for the financial year ending 31 December 2021. Clearlyindicate whether the movementrepresents an income or an expense. (20) Note: - Show all calculations, marks are awarded for calculations. - You may round off to the nearest Rand. On 1 March 2020, the companyentered into a lease agreementin order to lease a manufacturing machine with a cost price of 250000 (VAT inclusive). The period of the lease is five years, and the useful life of the machineryis estimated at six years. The following is an extractfrom the lease agreement: 4.1.1 Ownership of the machinerywill be transferred to the Lessee at the end of the lease. 4.1.2 Should the Lessee cancel the lease, the Lessor's losseswill be borne by the Lessee. Monthly instalments are payable in arrears and amount to R5 947 (VAT inclusive). The company used the manufacturing machine for a qualifying purpose. The companyis a registered VAT vendor. Required: Provide the deferred tax movement per the balancesheetmethod for the lease agreement for the financial year ending 31 December 2021. Clearlyindicate whether the movementrepresents an income or an expense. (20) Note: - Show all calculations, marks are awarded for calculations. - You may round off to the nearest Rand

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