Question 2 (25 marks) Rex Limited is a distributor of electrical appliances throughout New Zealand and also carries out a number of other business transactions. Set out below is a list of balances extracted from the adjusted trail balance of the company as at financial year end date 31 March 2021: Accounts with Debit Balances Amount (S) Revaluation Loss Building 238.000 Depreciation Building 102,000 Depreciation Plant & Equipment 323,000 Depreciation Vehicle 127.500 Impairment Vehicle 8,500 Purchases 28,940,800 Doubtful Debts 17,000 Bad Debts 34,000 Audit Fees 68,000 Donation to religious crganisations in New Zealand 59,500 Dividends paid (Net) 367,200 Interest Expense 255,000 Expenditure related to Rental of Office Building 544,000 Inventory as at ! April 2019 425,000 Other Expenses 1.411,000 Net Loss Brought Forward - 1 April 2019 193,800 Provisional Tax 214,000 Tax paid on Overseas Income $5,000 Fringe Benefit Tax 98,600 Resident Withholding Tax for Dividends received 17,000 Accommodation provided to an employee is part of remuneration package, 61,200 Associated Persons Remuneration 532,100 Use of Money Interest IRD 37.400 Salaries and Wages (Net) 3.094,000 PAYE 165,000 KiwiSaver Contributions 180,200 ACC Levies 42,500 Bonus, gratuity and retiring allowance to employees 73.100 Resident Withholding Tax on Contract Income 25,500 Contract Expenses R16,000 Accounts with Credit Balunces Interest Income (Net) Gain from Revaluation of Shares Available for sale Gains from Revaluation of shares Held for trading Income Dividend Income (Net) Rental Income of Office Building Contract Income Overseas Income Amount (S) 30,600 850,000 1,020,000 58,189,00 244,800 408,000 884 000 297,500 Additional Notes: Income for the year ended 31 March 2021 consists of the following: Sales 39,999,300 Income from trade tie arrangement Note 1 1.700,000 Gains from sale of shares Note 2 3,100,000 Licensing agreements receipts Note 3 850,000 Land Transactions Note 4 9,350,000 Income in relation to s CWI Income Tax Act 2007 510,000 Income in relation to CX42 Income Tax Act 2017 680,000 s Total 58.189,300 Note 1: Rex Limited entered into an exclusive arrangement with an Oil Company to only sell its brand of petrol for a period of 10 years. Rex Limited also undertook that it would not establish a new service station business within five miles of its existing business for a period of five years without also agreeing to sell Shell products. Question 2 (25 marks) Rex Limited is a distributor of electrical appliances throughout New Zealand and also carries out a number of other business transactions. Set out below is a list of balances extracted from the adjusted trail balance of the company as at financial year end date 31 March 2021: Accounts with Debit Balances Amount (S) Revaluation Loss Building 238.000 Depreciation Building 102,000 Depreciation Plant & Equipment 323,000 Depreciation Vehicle 127.500 Impairment Vehicle 8,500 Purchases 28,940,800 Doubtful Debts 17,000 Bad Debts 34,000 Audit Fees 68,000 Donation to religious crganisations in New Zealand 59,500 Dividends paid (Net) 367,200 Interest Expense 255,000 Expenditure related to Rental of Office Building 544,000 Inventory as at ! April 2019 425,000 Other Expenses 1.411,000 Net Loss Brought Forward - 1 April 2019 193,800 Provisional Tax 214,000 Tax paid on Overseas Income $5,000 Fringe Benefit Tax 98,600 Resident Withholding Tax for Dividends received 17,000 Accommodation provided to an employee is part of remuneration package, 61,200 Associated Persons Remuneration 532,100 Use of Money Interest IRD 37.400 Salaries and Wages (Net) 3.094,000 PAYE 165,000 KiwiSaver Contributions 180,200 ACC Levies 42,500 Bonus, gratuity and retiring allowance to employees 73.100 Resident Withholding Tax on Contract Income 25,500 Contract Expenses R16,000 Accounts with Credit Balunces Interest Income (Net) Gain from Revaluation of Shares Available for sale Gains from Revaluation of shares Held for trading Income Dividend Income (Net) Rental Income of Office Building Contract Income Overseas Income Amount (S) 30,600 850,000 1,020,000 58,189,00 244,800 408,000 884 000 297,500 Additional Notes: Income for the year ended 31 March 2021 consists of the following: Sales 39,999,300 Income from trade tie arrangement Note 1 1.700,000 Gains from sale of shares Note 2 3,100,000 Licensing agreements receipts Note 3 850,000 Land Transactions Note 4 9,350,000 Income in relation to s CWI Income Tax Act 2007 510,000 Income in relation to CX42 Income Tax Act 2017 680,000 s Total 58.189,300 Note 1: Rex Limited entered into an exclusive arrangement with an Oil Company to only sell its brand of petrol for a period of 10 years. Rex Limited also undertook that it would not establish a new service station business within five miles of its existing business for a period of five years without also agreeing to sell Shell products