Lallana is a company operating in the manufacturing and maintenance industry. Lallana is listed on the Johannesburg Stock Exchange and has a $31$ December financial year end. You are currently reviewing the financial statements of Lallana. Your assistant has presented the following schedule of information relating to the year ended $31$ December $2017$: ITEM AMOUNT Lallana's accounting profit for the year ended $31$ December $2017$ after correctly accounted for all items: R $5750000$ Dividends received: Dividends received are exempt from normal tax in terms of s $10(1)($k$).$ R $74500$ Foreign income received $($after deduction of R$5000$ relating to foreign taxes$)$: The foreign income is not taxable in South Africa R $35000$ Gain on disposal of land: Lallana purchased land for the future development of a new factory building on $31$ March $2016.$ Due to the recent availability of factory buildings in the area, Lallana sold the land at an amount of R$1550000$ on $1$ January $2017.$ The original cost of the land amounted to R$1200000.$ Land is measured according to the cost model in terms of IAS $16$ Property, Plant and Equipment. The proceeds from the sale of land is a receipt of a capital nature for tax purposes. R $350000$ Depreciation on plant and equipment: The tax allowances on the plant and equipment amounted to R$900000.$ On $31$ December $2017$ the carrying amount of the plant and equipment amounted to R$3168000$ while the tax base was R$2500000.$ R $876000$

Correction of prior period error:

R $300000$

On $30$ November $2016$ Lallana received an amount of R$300000$ from a customer for services that were rendered during February $2017.$ The accountant recognised the $R300000$ as revenue in November $2016.$ For tax purposes, the R$300000$ was taxed in the financial year ended $31$ December $2016.$

Assessed tax loss on $31$ December $2017$:

RO

Lallana suffered operating losses during the previous financial year and had an assessed tax loss of R$900000$ on $31$ December $2016.$ The company correctly utilised R$344000$ of the assessed tax loss by recognising a deferred tax asset of R$96320$ relating to the assessed loss on $31$ December $2017.$

Additional information

There are no temporary differences other than those that are apparent from the information contained in the question.

The only non$-$taxable and non$-$deductible items included in the accounting profit or loss are those that are apparent from the information provided.

The capital gains tax inclusion rate is $80\%.$

You may assume that all amounts are material.

$\backslash$table$[[$REQUIRED$,$MARKS$],[1)$ Prepare the income tax note to the financial statements of$,20],[$Lallana Ltd for the year ended $31$ December $2017$ as required,$],[$by IAS $12\mathrm{.}79,80$ and $81($c$)($i$)$ Income Taxes.,$],[$Please note:,$],[-$ Comparative figures are not required.,$],[-$ The movement in temporary differences in the current tax,$],[$calculation has to be calculated by using the statement of$,],[$financial position method.,$],[$The income tax rate is $28\%$ instead of $27\%,]]$