Please do question b:
b) Calculate the deferred tax balance in the statement of financial position of Gin Ltd for both the years ended 30 June 2018 and 30 June 2019, using the statement of financial position approach, according to the requirements of IAS 12, Income taxes. Indicate if your answer is a deferred tax asset or a deferred tax liability.
again, please do question b
The profit before tax of in for the year ended 30 June 2015 outdo o r to account the additional information below. The probefore tax e s contos do deductible amounting to R15 000 and interest paid on VAT p a mounting to R4700 The company provides for difered on morary difference of position approach. There are no other motorlamporary rese a rc h question. There is certainty beyond reasonable doubt that the company will have in here against which any deductible temporary or can be sed loss of R516 000 for the 2018 Bax year The following is an extract from the trial balance of and for the yea r 2018 30 June 2015 respectively before taking into account the additional information 2018 D 2019 31 August 2019 Pradinance the period Machinery cor t) Accumulated depreciation machinery Vw costr2) 1 200 000 OD 000 200 000 20 1 One 2013 theory R1 225 000 mary Nethermachinery was purchador d e theo 2017. One 2013 d e 2018 R600 000 and RSOO 000 spectively. This se ction has th e a n g records of the June 2012 2. At the financi a r e change the residual the com 000. Ther e a change thee of the All the who 2016. The vehicles were available for use as well as brought Nor ies were red or disposed of since then. The state of the on acquisition were determined to be five years, which remained unchanged t o the The flect of this change has not yet been recorded in the counting record of G o h anded 30 June 2010. The SA Revenue Service w a wance our own according to the straighine method in mo tion 11 of the income Tax Act 3. Gin Lid valivary according to the r outinho Dunghe normal an error was discovered in the computer program which is for e n inventory. Further investigation conued t hi r suttede inventory in the current and prior years FAC302020 ASSIGNMENT 01 ned The following is a summary of the w method on the r ives on of doing into according to the Original com o atency on Theo ry REQUIRED: Calculate the correct profit before tax in the statement of prot o s and the comprehensive income of Gin Lid for the year ended 30 June 2019, account the above information b) Calculate the deemed tax balance in the statement of financial position of G M for both the years anded 30 June 2018 and 30 June 2019, using the statement of financial position approach cording to the requirements of SAS 12 cm as indicate your answer is a defned tax or a deemed tax ASSIGNMENT 01 (50 marks) WRITTEN ASSIGNMENT Gin Lid, a listed South African company is a distiller and retailer of gin and other spirits. The company has a 30 Jun financial year-end The profit before tax of Gin Lid for the year ended 30 June 2019 amount to R40 000 before taking into account the additional information below. The probeloretandudes donations and not tax deductible amounting to R15 000 and interest paid on VAT penalties among to R4 700 The company provides for deferred tax on all temporary Gerences using the statement of financial position approach. There are no other exempt or temporary differences except those mentioned in the question. There is certainty beyond reasonable doubt that the company will have suficient taxable profit in the future against which any deductible temporary differences can be used in Lid hasan assessed loss of R516 000 for the 2018 tax year. The following is an extract from the trial balance of Gin Lid for the years ended 30 June 2018 and 30 June 2019 respectively, before taking into account the additional information below 2019 2018 DelCr) DrC) Prepaid insurance for the period 1 July 2019 to 31 August 2019) Machinery at cost refer 1) Accumulated depreciation - machinery (refer 1) Vehicles at cost (refer 2) Accumulated depreciation - vehicles (refer 2) 80 000 1 200 000 (432 000) 320 000 (192000) 1 200 000 (240 000) 320 000 (128 000) Additional information 1. On 30 June 2019 the company sold all its machinery for R1 225 000 and decided to the lease al machinery in future. No other machinery was purchased or sold since the original acquisition date on 1 July 2017. On 30 June 2019 and 30 June 2018 the tax base of the machinery amounted to R600 000 and R900 000 respectively. This sales transaction has not yet been recorded in the accounting records of Gin Lid for the year ended 30 June 2019 2. After the draft annual financial statements of Gin Lid had been prepared the directors decided to change the residual value of the vehicles from Rnil to R30 000. The residual value was changed due to a change in the use of the vehicles. All the vehicles of Gin Lid were originally purchased on 1 July 2016. The vehicles were available for use, as well as brought into use, on acquisition date No other vehicles were acquired or disposed of since then. The estimated useful lives of the vehicles on acquisition were determined to be five years, which remained unchanged throughout the period The effect of this change has not yet been recorded in the accounting records of Good for the year ended 30 June 2019. The SA Revenue Service allows a tax allowance of four years on vehicles according to the straight line method in terms of section 11(e) of the Income Tax Act Gin Lid values all its inventory according to the first first-out valuation method. During the recent interim audit, an error was discovered in the computer program which is used for the valuation of inventory. Further investigation confirmed that this error also resulted in the understatement of inventory in the current and prior years. ASSIGNMENT 01 (continued) The following is a summary of the valuation of closing inventories, according to the first-in, first-out method, on the respective dates: 30 June 30 June 30 June 30 June 2019 2018 2017 2016 R Correct valuation recalculated 95 000 110 450 170 400 255 000 Original incorrect valuation (90 000) (95 250) (135 000 (240 000) 5 000 15 200 35 400 15 000 The SA Revenue Service indicated that they will not reopen the prior years' tax assessments to adjust the incorrect inventory valuations. These adjustments of the inventory valuations have not yet been recorded in the accounting records of Gin Ltd. 4. The SA normal tax rate changed from 29% in the previous years to 28% in 2019. The capital gains tax inclusion rate is 80%. 5. Assume all amounts to be material. REQUIRED: Marks a) Calculate the correct profit before tax in the statement of profit or loss and other comprehensive income of Gin Ltd for the year ended 30 June 2019, taking into account all the above information. b) Calculate the deferred tax balance in the statement of financial position of Gin Ltd for both the years ended 30 June 2018 and 30 June 2019, using the statement of financial position approach, according to the requirements of IAS 12, Income taxes. Indicate if your answer is a deferred tax asset or a deferred tax liability. Please note: There is certainty beyond reasonable doubt that the company will have sufficient taxable profit in the future against which any deductible temporary differences can be utilised. ASSIGNMENT 01 (50 marks) WRITTEN ASSIGNMENT Gin Lid, a listed South African company is a distiller and retailer of gin and other spirits. The company has a 30 Jun financial year-end The profit before tax of Gin Lid for the year ended 30 June 2019 amount to R40 000 before taking into account the additional information below. The probeloretandudes donations and not tax deductible amounting to R15 000 and interest paid on VAT penalties among to R4 700 The company provides for deferred tax on all temporary Gerences using the statement of financial position approach. There are no other exempt or temporary differences except those mentioned in the question. There is certainty beyond reasonable doubt that the company will have suficient taxable profit in the future against which any deductible temporary differences can be used in Lid hasan assessed loss of R516 000 for the 2018 tax year. The following is an extract from the trial balance of Gin Lid for the years ended 30 June 2018 and 30 June 2019 respectively, before taking into account the additional information below 2019 2018 DelCr) DrC) Prepaid insurance for the period 1 July 2019 to 31 August 2019) Machinery at cost refer 1) Accumulated depreciation - machinery (refer 1) Vehicles at cost (refer 2) Accumulated depreciation - vehicles (refer 2) 80 000 1 200 000 (432 000) 320 000 (192000) 1 200 000 (240 000) 320 000 (128 000) Additional information 1. On 30 June 2019 the company sold all its machinery for R1 225 000 and decided to the lease al machinery in future. No other machinery was purchased or sold since the original acquisition date on 1 July 2017. On 30 June 2019 and 30 June 2018 the tax base of the machinery amounted to R600 000 and R900 000 respectively. This sales transaction has not yet been recorded in the accounting records of Gin Lid for the year ended 30 June 2019 2. After the draft annual financial statements of Gin Lid had been prepared the directors decided to change the residual value of the vehicles from Rnil to R30 000. The residual value was changed due to a change in the use of the vehicles. All the vehicles of Gin Lid were originally purchased on 1 July 2016. The vehicles were available for use, as well as brought into use, on acquisition date No other vehicles were acquired or disposed of since then. The estimated useful lives of the vehicles on acquisition were determined to be five years, which remained unchanged throughout the period The effect of this change has not yet been recorded in the accounting records of Good for the year ended 30 June 2019. The SA Revenue Service allows a tax allowance of four years on vehicles according to the straight line method in terms of section 11(e) of the Income Tax Act Gin Lid values all its inventory according to the first first-out valuation method. During the recent interim audit, an error was discovered in the computer program which is used for the valuation of inventory. Further investigation confirmed that this error also resulted in the understatement of inventory in the current and prior years. ASSIGNMENT 01 (continued) The following is a summary of the valuation of closing inventories, according to the first-in, first-out method, on the respective dates: 30 June 30 June 30 June 30 June 2019 2018 2017 2016 R Correct valuation recalculated 95 000 110 450 170 400 255 000 Original incorrect valuation (90 000) (95 250) (135 000 (240 000) 5 000 15 200 35 400 15 000 The SA Revenue Service indicated that they will not reopen the prior years' tax assessments to adjust the incorrect inventory valuations. These adjustments of the inventory valuations have not yet been recorded in the accounting records of Gin Ltd. 4. The SA normal tax rate changed from 29% in the previous years to 28% in 2019. The capital gains tax inclusion rate is 80%. 5. Assume all amounts to be material. REQUIRED: Marks a) Calculate the correct profit before tax in the statement of profit or loss and other comprehensive income of Gin Ltd for the year ended 30 June 2019, taking into account all the above information. b) Calculate the deferred tax balance in the statement of financial position of Gin Ltd for both the years ended 30 June 2018 and 30 June 2019, using the statement of financial position approach, according to the requirements of IAS 12, Income taxes. Indicate if your answer is a deferred tax asset or a deferred tax liability. Please note: There is certainty beyond reasonable doubt that the company will have sufficient taxable profit in the future against which any deductible temporary differences can be utilised. Gin Ltd, a listed South African company, is a distiller and retailer of gin and other spirits. The compan has a 30 June financial year-end. The profit before tax of Gin Lid for the year ended 30 June 2019 amounted to R450 000, before takin into account the additional information below. The profit before tax includes donations paid (not ta deductible) amounting to R15 000 and interest paid on VAT penalties amounting to R4 700 The company provides for deferred tax on all temporary differences using the statement of financie position approach. There are no other exempt or temporary differences except those mentioned in th question. There is certainty beyond reasonable doubt that the company will have sufficient taxable prof in the future against which any deductible temporary differences can be utilised Gin Lid has a assessed loss of R516 000 for the 2018 tax year. The following is an extract from the trial balance of Gin Lid for the years ended 30 June 2018 an 30 June 2019 respectively, before taking into account the additional information below. 2019 2018 DriC) Drin) Prepaid insurance (for the period 1 July 2019 to 31 August 2019) Machinery at cost (refer 1) Accumulated depreciation - machinery (refer 1) Vehicles at cost (refer 2) Accumulated depreciation - vehicles (refer 2) 80 000 1 200 000 (432 000) 320 000 (192 000) 1 200 000 (240 000) 320 000 (128 000) Additional information 1. On 30 June 2019 the company sold all its machinery for R1 225 000 and decided to rather lease a machinery in future. No other machinery was purchased or sold since the original acquisition dat on 1 July 2017. On 30 June 2019 and 30 June 2018 the tax base of the machinery amounted R600 000 and R900 000 respectively. This sales transaction has not yet been recorded in th accounting records of Gin Ltd for the year ended 30 June 2019. 2. After the draft annual financial statements of Gin Ltd had been prepared, the directors decided change the residual value of the vehicles from Rnil to R30 000. The residual value was changed du to a change in the use of the vehicles. All the vehicles of Gin Lid were originally purchased 1 July 2016. The vehicles were available for use, as well as brought into use, on acquisition date No other vehicles were acquired or disposed of since then. The estimated useful lives of the vehicle on acquisition were determined to be five years, which remained unchanged throughout the period The effect of this change has not yet been recorded in the accounting records of Gin Lid for the yea ended 30 June 2019. The SA Revenue Service allows a tax allowance of four years on vehicle according to the straight-line method, in terms of section 11 (e) of the Income Tax Act. Gin Ltd values all its inventory according to the first-in, first-out valuation method. During the recer interim audit, an error was discovered in the computer program which is used for the valuation inventory. Further investigation confirmed that this error also resulted in the understatement inventory in the current and prior years. The profit before tax of in for the year ended 30 June 2015 outdo o r to account the additional information below. The probefore tax e s contos do deductible amounting to R15 000 and interest paid on VAT p a mounting to R4700 The company provides for difered on morary difference of position approach. There are no other motorlamporary rese a rc h question. There is certainty beyond reasonable doubt that the company will have in here against which any deductible temporary or can be sed loss of R516 000 for the 2018 Bax year The following is an extract from the trial balance of and for the yea r 2018 30 June 2015 respectively before taking into account the additional information 2018 D 2019 31 August 2019 Pradinance the period Machinery cor t) Accumulated depreciation machinery Vw costr2) 1 200 000 OD 000 200 000 20 1 One 2013 theory R1 225 000 mary Nethermachinery was purchador d e theo 2017. One 2013 d e 2018 R600 000 and RSOO 000 spectively. This se ction has th e a n g records of the June 2012 2. At the financi a r e change the residual the com 000. Ther e a change thee of the All the who 2016. The vehicles were available for use as well as brought Nor ies were red or disposed of since then. The state of the on acquisition were determined to be five years, which remained unchanged t o the The flect of this change has not yet been recorded in the counting record of G o h anded 30 June 2010. The SA Revenue Service w a wance our own according to the straighine method in mo tion 11 of the income Tax Act 3. Gin Lid valivary according to the r outinho Dunghe normal an error was discovered in the computer program which is for e n inventory. Further investigation conued t hi r suttede inventory in the current and prior years FAC302020 ASSIGNMENT 01 ned The following is a summary of the w method on the r ives on of doing into according to the Original com o atency on Theo ry REQUIRED: Calculate the correct profit before tax in the statement of prot o s and the comprehensive income of Gin Lid for the year ended 30 June 2019, account the above information b) Calculate the deemed tax balance in the statement of financial position of G M for both the years anded 30 June 2018 and 30 June 2019, using the statement of financial position approach cording to the requirements of SAS 12 cm as indicate your answer is a defned tax or a deemed tax ASSIGNMENT 01 (50 marks) WRITTEN ASSIGNMENT Gin Lid, a listed South African company is a distiller and retailer of gin and other spirits. The company has a 30 Jun financial year-end The profit before tax of Gin Lid for the year ended 30 June 2019 amount to R40 000 before taking into account the additional information below. The probeloretandudes donations and not tax deductible amounting to R15 000 and interest paid on VAT penalties among to R4 700 The company provides for deferred tax on all temporary Gerences using the statement of financial position approach. There are no other exempt or temporary differences except those mentioned in the question. There is certainty beyond reasonable doubt that the company will have suficient taxable profit in the future against which any deductible temporary differences can be used in Lid hasan assessed loss of R516 000 for the 2018 tax year. The following is an extract from the trial balance of Gin Lid for the years ended 30 June 2018 and 30 June 2019 respectively, before taking into account the additional information below 2019 2018 DelCr) DrC) Prepaid insurance for the period 1 July 2019 to 31 August 2019) Machinery at cost refer 1) Accumulated depreciation - machinery (refer 1) Vehicles at cost (refer 2) Accumulated depreciation - vehicles (refer 2) 80 000 1 200 000 (432 000) 320 000 (192000) 1 200 000 (240 000) 320 000 (128 000) Additional information 1. On 30 June 2019 the company sold all its machinery for R1 225 000 and decided to the lease al machinery in future. No other machinery was purchased or sold since the original acquisition date on 1 July 2017. On 30 June 2019 and 30 June 2018 the tax base of the machinery amounted to R600 000 and R900 000 respectively. This sales transaction has not yet been recorded in the accounting records of Gin Lid for the year ended 30 June 2019 2. After the draft annual financial statements of Gin Lid had been prepared the directors decided to change the residual value of the vehicles from Rnil to R30 000. The residual value was changed due to a change in the use of the vehicles. All the vehicles of Gin Lid were originally purchased on 1 July 2016. The vehicles were available for use, as well as brought into use, on acquisition date No other vehicles were acquired or disposed of since then. The estimated useful lives of the vehicles on acquisition were determined to be five years, which remained unchanged throughout the period The effect of this change has not yet been recorded in the accounting records of Good for the year ended 30 June 2019. The SA Revenue Service allows a tax allowance of four years on vehicles according to the straight line method in terms of section 11(e) of the Income Tax Act Gin Lid values all its inventory according to the first first-out valuation method. During the recent interim audit, an error was discovered in the computer program which is used for the valuation of inventory. Further investigation confirmed that this error also resulted in the understatement of inventory in the current and prior years. ASSIGNMENT 01 (continued) The following is a summary of the valuation of closing inventories, according to the first-in, first-out method, on the respective dates: 30 June 30 June 30 June 30 June 2019 2018 2017 2016 R Correct valuation recalculated 95 000 110 450 170 400 255 000 Original incorrect valuation (90 000) (95 250) (135 000 (240 000) 5 000 15 200 35 400 15 000 The SA Revenue Service indicated that they will not reopen the prior years' tax assessments to adjust the incorrect inventory valuations. These adjustments of the inventory valuations have not yet been recorded in the accounting records of Gin Ltd. 4. The SA normal tax rate changed from 29% in the previous years to 28% in 2019. The capital gains tax inclusion rate is 80%. 5. Assume all amounts to be material. REQUIRED: Marks a) Calculate the correct profit before tax in the statement of profit or loss and other comprehensive income of Gin Ltd for the year ended 30 June 2019, taking into account all the above information. b) Calculate the deferred tax balance in the statement of financial position of Gin Ltd for both the years ended 30 June 2018 and 30 June 2019, using the statement of financial position approach, according to the requirements of IAS 12, Income taxes. Indicate if your answer is a deferred tax asset or a deferred tax liability. Please note: There is certainty beyond reasonable doubt that the company will have sufficient taxable profit in the future against which any deductible temporary differences can be utilised. ASSIGNMENT 01 (50 marks) WRITTEN ASSIGNMENT Gin Lid, a listed South African company is a distiller and retailer of gin and other spirits. The company has a 30 Jun financial year-end The profit before tax of Gin Lid for the year ended 30 June 2019 amount to R40 000 before taking into account the additional information below. The probeloretandudes donations and not tax deductible amounting to R15 000 and interest paid on VAT penalties among to R4 700 The company provides for deferred tax on all temporary Gerences using the statement of financial position approach. There are no other exempt or temporary differences except those mentioned in the question. There is certainty beyond reasonable doubt that the company will have suficient taxable profit in the future against which any deductible temporary differences can be used in Lid hasan assessed loss of R516 000 for the 2018 tax year. The following is an extract from the trial balance of Gin Lid for the years ended 30 June 2018 and 30 June 2019 respectively, before taking into account the additional information below 2019 2018 DelCr) DrC) Prepaid insurance for the period 1 July 2019 to 31 August 2019) Machinery at cost refer 1) Accumulated depreciation - machinery (refer 1) Vehicles at cost (refer 2) Accumulated depreciation - vehicles (refer 2) 80 000 1 200 000 (432 000) 320 000 (192000) 1 200 000 (240 000) 320 000 (128 000) Additional information 1. On 30 June 2019 the company sold all its machinery for R1 225 000 and decided to the lease al machinery in future. No other machinery was purchased or sold since the original acquisition date on 1 July 2017. On 30 June 2019 and 30 June 2018 the tax base of the machinery amounted to R600 000 and R900 000 respectively. This sales transaction has not yet been recorded in the accounting records of Gin Lid for the year ended 30 June 2019 2. After the draft annual financial statements of Gin Lid had been prepared the directors decided to change the residual value of the vehicles from Rnil to R30 000. The residual value was changed due to a change in the use of the vehicles. All the vehicles of Gin Lid were originally purchased on 1 July 2016. The vehicles were available for use, as well as brought into use, on acquisition date No other vehicles were acquired or disposed of since then. The estimated useful lives of the vehicles on acquisition were determined to be five years, which remained unchanged throughout the period The effect of this change has not yet been recorded in the accounting records of Good for the year ended 30 June 2019. The SA Revenue Service allows a tax allowance of four years on vehicles according to the straight line method in terms of section 11(e) of the Income Tax Act Gin Lid values all its inventory according to the first first-out valuation method. During the recent interim audit, an error was discovered in the computer program which is used for the valuation of inventory. Further investigation confirmed that this error also resulted in the understatement of inventory in the current and prior years. ASSIGNMENT 01 (continued) The following is a summary of the valuation of closing inventories, according to the first-in, first-out method, on the respective dates: 30 June 30 June 30 June 30 June 2019 2018 2017 2016 R Correct valuation recalculated 95 000 110 450 170 400 255 000 Original incorrect valuation (90 000) (95 250) (135 000 (240 000) 5 000 15 200 35 400 15 000 The SA Revenue Service indicated that they will not reopen the prior years' tax assessments to adjust the incorrect inventory valuations. These adjustments of the inventory valuations have not yet been recorded in the accounting records of Gin Ltd. 4. The SA normal tax rate changed from 29% in the previous years to 28% in 2019. The capital gains tax inclusion rate is 80%. 5. Assume all amounts to be material. REQUIRED: Marks a) Calculate the correct profit before tax in the statement of profit or loss and other comprehensive income of Gin Ltd for the year ended 30 June 2019, taking into account all the above information. b) Calculate the deferred tax balance in the statement of financial position of Gin Ltd for both the years ended 30 June 2018 and 30 June 2019, using the statement of financial position approach, according to the requirements of IAS 12, Income taxes. Indicate if your answer is a deferred tax asset or a deferred tax liability. Please note: There is certainty beyond reasonable doubt that the company will have sufficient taxable profit in the future against which any deductible temporary differences can be utilised. Gin Ltd, a listed South African company, is a distiller and retailer of gin and other spirits. The compan has a 30 June financial year-end. The profit before tax of Gin Lid for the year ended 30 June 2019 amounted to R450 000, before takin into account the additional information below. The profit before tax includes donations paid (not ta deductible) amounting to R15 000 and interest paid on VAT penalties amounting to R4 700 The company provides for deferred tax on all temporary differences using the statement of financie position approach. There are no other exempt or temporary differences except those mentioned in th question. There is certainty beyond reasonable doubt that the company will have sufficient taxable prof in the future against which any deductible temporary differences can be utilised Gin Lid has a assessed loss of R516 000 for the 2018 tax year. The following is an extract from the trial balance of Gin Lid for the years ended 30 June 2018 an 30 June 2019 respectively, before taking into account the additional information below. 2019 2018 DriC) Drin) Prepaid insurance (for the period 1 July 2019 to 31 August 2019) Machinery at cost (refer 1) Accumulated depreciation - machinery (refer 1) Vehicles at cost (refer 2) Accumulated depreciation - vehicles (refer 2) 80 000 1 200 000 (432 000) 320 000 (192 000) 1 200 000 (240 000) 320 000 (128 000) Additional information 1. On 30 June 2019 the company sold all its machinery for R1 225 000 and decided to rather lease a machinery in future. No other machinery was purchased or sold since the original acquisition dat on 1 July 2017. On 30 June 2019 and 30 June 2018 the tax base of the machinery amounted R600 000 and R900 000 respectively. This sales transaction has not yet been recorded in th accounting records of Gin Ltd for the year ended 30 June 2019. 2. After the draft annual financial statements of Gin Ltd had been prepared, the directors decided change the residual value of the vehicles from Rnil to R30 000. The residual value was changed du to a change in the use of the vehicles. All the vehicles of Gin Lid were originally purchased 1 July 2016. The vehicles were available for use, as well as brought into use, on acquisition date No other vehicles were acquired or disposed of since then. The estimated useful lives of the vehicle on acquisition were determined to be five years, which remained unchanged throughout the period The effect of this change has not yet been recorded in the accounting records of Gin Lid for the yea ended 30 June 2019. The SA Revenue Service allows a tax allowance of four years on vehicle according to the straight-line method, in terms of section 11 (e) of the Income Tax Act. Gin Ltd values all its inventory according to the first-in, first-out valuation method. During the recer interim audit, an error was discovered in the computer program which is used for the valuation inventory. Further investigation confirmed that this error also resulted in the understatement inventory in the current and prior years
