One of the products that Russia Limited manufactures and sells in its ordinary course of business is a standard $$water feature$$ used by various entities for decorative purposes on their premises. Russia Limited has a $31$ December year$-$end.

On $30$ September $20\mathrm{.}5,$ Russia Ltd was contracted to install a custom$-$designed water feature at the upmarket Excelsior Shopping Mall $($ESM$).$ This water feature is to be specifically designed in order to meet the requirements of ESM which include, amongst others, mini waterfalls that rotate and coloured water sprayed in time to various well$-$known musical tunes.

The total amount quoted by Russia Ltd for this contract was R$3\mathrm{.}6$ million. Russia Ltd will design and manufacture the water feature at their own premises, and once the design and manufacture is complete, will transport the unit and complete the installation at ESM$$s premises.

Installation is expected to be in March $20\mathrm{.}6.$ Given the unique specifications, only the Russia Ltd technical team will be able to complete the installation. In terms of the contract, $50\%$ of the contract price is payable in advance $($on $30$ September $20\mathrm{.}5),$ an additional $25\%$ when the job is half completed and the balance upon successful installation.

The contract was $50\%$ complete at $31$ December $20\mathrm{.}5,$ and the additional $25\%$ was received from ESM on $31$ December $20\mathrm{.}5.$ The only journal entries processed to account for this transaction in the $20\mathrm{.}5$ year were as follows:

Dr Bank R$2700000$

Cr Revenue $($P$/$L$)$ R$2700000$

To account for the $50\%$ deposit plus the $25\%$ progress payment received upon half completed contract $(75\%$ x R$3\mathrm{.}6$ million$)$

Dr Income tax expense $($P$/$L$)$ R$810000$

Cr SARS liability R$810000$

To account for the tax payable at $30\%$ on revenue recognized $(30\%$ x R$2\mathrm{.}7$ million$)$