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Answer according to South Africa Law - Financial Accounting Aladdin Limited is a dynamic company at the forefront of the health and safetyindustry, specializing in
Answer according to South Africa Law Financial Accounting Aladdin Limited is a dynamic company at the forefront of the health and safetyindustry, specializing in the manufacture and sale of disinfecting sprays, foggers,and other sanitizing equipment. The emergence of global health crises in recentyears has highlighted the importance of effective and efficient sanitizationmethods, propelling companies like Lockdown Limited to the center stage ofpublic and private health defence strategies.The company's financial year concludes on the th of February, aligning itsreporting period with the end of the winter season in many regions, a critical timefor the deployment of sanitizing solutions due to the increased incidence ofcommunicable diseases.During the fiscal year ending February Aladdin Limited faced a uniqueset of challenges and opportunities. The year was marked by a gradual decreasein global pandemicrelated restrictions, leading to varied demand fluctuations forsanitizing products across different markets. These dynamics forced AladdinLimited to reassess its manufacturing and distribution strategies to remaincompetitive and profitable.The following is an extract from the Statement of Financial Position of AladdinLimited for the year ended February :RandCurrent assets:Prepaid Expenses Water & ElectricityAccrued Income Interest on fixed depositNoncurrent liabilities:Deferred tax Current liabilities:Current tax payable: Income taxIncome Received in Advance RentAccrued Expenses TelephoneADDITIONAL INFORMATION: On April Aladdin Limited received its tax assessment for income taxfor the year ended February which reflected an assessed amount of R The accountant calculated and provided income tax for the tax yearas R The accountant agreed with the tax assessment and made the finalpayment on the same day to settle the amount due for the tax year Their accountant correctly calculated a Profit BEFORE tax of Rbut needs your help with the tax computation.Included in Profit before tax are the following transactions for the year ended February :TRANSACTION NOTE RANDDividends received Exempt from tax Donations paid Not tax deductible Profit on sale of machinery See Additional Information Depreciation on machinery See Additional Information Depreciation on admin buildings No wear and tear allowanceallowed by SAR. Depreciation on motor vehicles All vehicles were in use for thefull financial year.Note: A section e wearand tear allowance of Rper annum was allowed bySARS A machinery was sold during the year. All disposal entries have beencorrectly recorded by the accountant. Details of the affected machine at the dateof sale are as follows:Capital profit Noncapital profit Capital gain Taxable capital gain Recoupment The wear and tear allowance allowed by SARS for the currentfinancial year relating the machinery amounts to R This is correctlycalculated after taking into account the sale of the machine The following prepaid expenses, accrued expenses, income received inadvance and accrued income appeared in the statement of financial positionof Aladdin Limited at February These amounts were found to betaken correctly into account in the calculation of the profit before tax of RAs shown in RANDPrepaid Expenses Water & Electricity R Accrued Expenses Telephone R Income Received in Advance Rent R Accrued Income Interest on fixed deposit R Dividends paid by the company amounted to R for the year. Ignoredividend tax Income tax and the inclusion rate for capital gains tax: The tax rate was for the past two years. There are no temporary orpermanent differences other than those which are apparent from the giveninformation. The inclusion rate for capital gains purposes is The company uses the comprehensive
income statement approach tocalculate deferred tax.
Required:
Prepare the income tax note only the tax rate reconciliation section that will accompany the Statement of Comprehensive Income for the year ended February in accordance with South Africa International Financial Reporting Standards. marks
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