10.1.4 ACCOUNTING 3: ASSIGNMENT 1 [100] Question 1 (30 marks: 45 minutes) The following draft statement of profit or loss for the year ended 28 February 2021 was prepared by the accountant of Mix \& More Limited. REGENT BUSINESS SCHOOL (RBS) - JANUARY 2023 3. Investment income This comprises dividends received from listed investments. A dividend receivable from a listed company of R100 000 that was declared during February 2021 has yet to be recorded. 4. Taxation expense The corporate normal income tax rate is 30% throughout. A corporate capital gains tax rate of 18% (i.e. 60% of the normal income tax rate) is applicable to all realised capital gains throughout. Ignore all other forms of taxation. Provisional tax payments of R1 280000 were made during the year ended 28 February 2021 (2020: R700 000). The tax expense for the 2021 and 2020 years has yet to be calculated. 4. Taxation expense The corporate normal income tax rate is 30% throughout. A corporate capital gains tax rate of 18% (i.e. 60% of the normal income tax rate) is applicable to all realised capital gains throughout. Ignore all other forms of taxation. Provisional tax payments of R1 280000 were made during the year ended 28 February 2021 (2020: R700 000). The tax expense for the 2021 and 2020 years has yet to be calculated. The product development costs were capitalised for accounting purposes in 2019. The R240 000 product development costs capitalised during 2019 were deducted in the determination of taxable income for the year ended 28 February 2019. 31 REGENT BUSINESS SCHOOL (RBS) - JANUARY 2023 BACHELOR OF COMMERCE YEAR 3 - ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE The medical benefits are only deductible for tax purposes when payments are made. No payments were made in either 2020 or 2021. Traffic fines of R50 000 were incurred during the year ended 28 February 2021 (2020 - Nil). Traffic fines are not deductible in the determination of taxable income. 7. Employee benefits expense Employee benefits expense amounted to R1 790000 (2020: R 1560 000) for the year. REQUIRED A. Prepare the statement of profit or loss (including notes thereto) of Mix \& More Limited for the year ended 28 February 2021, in conformity with International Financial Reporting Standards, in so far as the above information permits. Mix \& More Limited presents a separate statement of profit or loss and a classification of expenses by function on the face of the statement of profit or loss. (Comparative figures ARE required). Work to the nearest R'000. Ignore accounting policies note. B. Prepare the deferred taxation note to Mix \& More Limited's statement of financial position at 28 February 2021 (Comparative figures ARE required.) Work to the nearest R'000. Ignore the accounting policies