Question $2$:

$(30$ marks$)$

The year$-$end of Sweet Cravings Ltd$.$ is $31$ December $2023.$ The following information is presented to you:

The profit before tax for $2023$ was R$375000$ and the taxable income was R$396250.$

Profit before tax for $2023$ includes a tax fine of R$5000.$

The statement of financial position as at $31$ December $2023$ shows an income received in advance of R$10000.$

The rent expense is paid annually in advance on $1$ March. Rent payments were as follows:

$1$ March $2022$: R$42000$

$1$ March $2023$: R$48000$

On $1$ January $2021,$ Sweet Cravings Ltd$.$ purchased equipment with a cost price of

R$150000.$ On $30$ September $2022$ additional equipment to the value of R$40000$ was purchased. On $31$ March $2023$ equipment with a cost price of R$15000,$ originally purchased on $1$ January $2021,$ was sold for R$8750.$ Depreciation is calculated at $25\%$ per annum on the straight$-$line basis.

$6.$ The tax base of equipment was R$84000$ on $31$ December $2023$ and R$125000$ on $31$ December $2022.$

$7.$ There are no other items which give rise to temporary or other differences, except for those indicated in the above$-$mentioned information.

$8.$ Assume a tax rate of $28\%.$

YOU ARE REQUIRED TO:

a$)$ Calculate the profit or loss on sale of equipment on $31$ March $2023.(4)$

b$)$ Disclose the equipment note to the statement of financial position at $31$ December $2023.$ Comparative figures are required. $(9)$

c$)$ Disclose the deferred tax note to the statement of financial position at $31$ December $2023.$ Comparative figures are required. $(9)$

d$)$ Disclose the income tax expense note to the statement of comprehensive income for the year ended $31$ December $2023.$ Comparative figures are not required. $(8)$