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. Note 2021 2020 00 Sales 1 9 600 8 000 Profit from operations 2 4 600 3 800 Investment income 3 400 1 200 Interest paid (120) (1 500) Profit before tax 4 880 3 500 Taxation expense 4 ? ? Profit after tax ? ? Additional information: 1. Sales Sales comprised the following: Sale of goods 7 500 6 000 Services rendered 2 000 1 750 Royalties taxable in the current reporting period 100 250 9 600 8 000 2. Profit from operations Profit from operations includes the following: Cost of sales (excluding depreciation on plant and machinery) 2 000 1 700 Depreciation plant and machinery 400 400 Additional depreciation in respect of plant and machinery as result of a change in accounting estimate 100 - Distribution costs (including traffic fines: see note 4 below) 1 850 1 470 BACHELOR OF COMMERCE YEAR 3 ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE 31 REGENT BUSINESS SCHOOL (RBS) JANUARY 2023 Administrative costs 900 450 Profit from sale of land (see note 5 below) 400 - Other expenses 150 180 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 280 000 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. BACHELOR OF COMMERCE YEAR 3 ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE 32 REGENT BUSINESS SCHOOL (RBS) JANUARY 2023 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.