Casio Ltd is a wholesaler and retailer of stationery and other related products. The company supplies stationery stores and public schools throughout Gauteng and Mpumalanga. With the recent issues in the Limpopo province, the board of directors has decided to expand the operations and supply all the schools in that province. The financial director, Mr$.$ Pentel, has been advised by the bank that a complete set of financial statements are required with the application for a long term loan.

Mr$.$ Pentel is required to attend urgent business in Cape Town and has enlisted your assistance in preparing some of the financial information while he is away. He has provided the following information for the financial year ended $30$ June $2024$:

Income

$$The revenue for the year comprised of sales of R$23720420.$ The mark up on cost of goods is constant at $20\%.$

$$Other income comprises of the following items:

R

Interest on debentures

$($Casio Ltd holds $3500$ R$12015\%$ debentures$)$

$37500$

Royalties received during $2024$

$($The royalty agreement states that R$22000$ is due every month$)$

$220000$

Royalties received in advance $1$ July $2023$

$66000$

$$Casio Ltd has a $20\%$ share in Sharpie Limited which is listed on the Johannesburg Stock Exchange. Sharpie Limited paid an interim dividend of R$120000$ on $29$ December $2021$ to the shareholders and declared a final dividend of R$300000$ on $27$ June $2024.$

$$The sales agent in Mpumalanga sold $20000$ school stationery packs at R$132$ each by $30$ June $2013.$ The agreement with Casio Ltd was that the sales agent will receive a commission of $15\%$ for each of the stationery packs sold. This information was only received on $4$ July $2024$ and had not yet been accounted for in the financial records.

Expenses

$$The operating expenses for the year were R$1114000$ and included the following:

R

Finance costs

$286000$

Insurance expenses paid for July and August $2024$

$72000$

Insurance expenses paid in advance $1$ July $2023$

$32000$

Donations $($R$40000$ is not tax deductible$)$

$130000$

Furniture and equipment:

$$Furniture and equipment was originally purchased on $1$ July $2021$ at a cost of R$1680000.$ Depreciation is provided at $10\%$ p$.$a$.$ This furniture and equipment was destroyed by fire in the factory during the last week of April $2024$ and was not insured. The depreciation and loss as a result of the fire has been a correctly accounted for in the operating expenses for the year. Despite the damage caused by the fire, Casio Ltd could still continue business in its existing premises.

$$On $1$ June $2024$ the company purchased new furniture and equipment. This new furniture and equipment cost R$2100000$ and management considers it to have a useful life of $5$ years and no residual value.

$$The tax authorities have granted an annual allowance of $20\%($this allowance is not

apportioned for time$).$

Intangible asset

$$Casio Ltd obtained the help of a website consultant to design a new website for the company in order to boost on$-$line sales during the $2023$ financial year. The consultant

charged R$400$

$000$ for the website development and the financial director agreed to pay R$200000$ when development commenced. This was capitalized when paid.

However, as many difficulties arose due to additional firewalls required, by the end of the $2023$ financial year end management was uncertain whether this website would be feasible and wrote of the R$200000$ as an expense.

$$During the $2024$ financial year, new software programs became available which aided in the security features required for the website. Management incurred an additional R$118000$ for this new software program and paid the consultant the balance of his fee. By $30$ April $2024,$ management could prove feasibility of the new website and the availability of a market and subsequently planned to launch the product from $1$ May $2024.$ The financial director, Mr$.$ Pentel, concluded that the website met the requirements of IAS $38$ and capitalized the costs incurred in the current financial year. The website is to be amortised over a useful life of $5$ years from the date of launch. This cost has not yet been included in the $2024$ operating expenses.

Additional information

$$The deferred tax account had a credit balance of R$84560$ at the beginning of the year arising from furniture and equipment; royalties received in advance and prepaid insurance.

$$The assessment received from the tax authorities for the $2023$ year reflected that the amount of the assessed tax on taxable profit was R$18000$ more than the amount provided for current normal tax in the $2023$ year.

$$The normal tax rate is $28\%$ for all periods presented and the inclusion rate for purposes of capital gains is $66\mathrm{.}67\%.$

You are required to:

a$)$ Prepare the statement of profit or loss and other comprehensive income of Casio Ltd for the year ended $30$ June $2024$

b$)$ Prepare the taxation $($including the tax reconciliation note$)$ and deferred taxation

note for the financial statements of Casio Ltd for