90.2K

Verified Solution

Link Copied!

Required:

Q$\mathrm{.}2\mathrm{.}1$ Using the information provided above, prepare all journal entries that would be

$(25)$

processed to record the taxation expense, taxation payable and deferred tax in the financial records of Swift Limited for the year ended $31$ December $2023.$

Show all relevant workings.

Round off your answers to the nearest Rand.

Journal narrations are required.

Q$\mathrm{.}2\mathrm{.}2$ Prepare the deferred taxation note as at $31$ December $2023.$ Comparatives are not required

The $2022$ tax assessment was received on $15$ April $2023$ showing assessed current tax of R$340600.$ Current tax provided by the accountant amounted to R$320400$ in the $2022$ reporting period.

The company made a first provisional payment of R$120000,$ and a second provisional payment based on estimated taxable profits of R$1400000$ in respect of current tax for the current year.

Other expenses include depreciation on vehicles of R$50000$ and the wear and tear allowance amounted to R$60000.$ Vehicles had a carrying amount of R$200000$ and a tax base of R$300000$ at the beginning of the year.

Rent of R$110000$ was prepaid during the current year $(2022$: R$152600).$ Assume that rental expense is deductible for income tax purposes when incurred or paid, whichever occurs first.

SA's normal tax rate changed from $28\%$ in $2022$ to $27\%$ in $2023,$

revenue $-$ R$5200000,$ dividend income $-$ R$150000,$ Cost of sales $-(3400000),$ Donations $-($R$20000),$ Fines $(15000),$ Other expenses $(300000),$ Profit before tax $-$ R$1615000$

Answer & Explanation Solved by verified expert

See Answer