QUESTION $2(43$ marks$)$Milkwood Limited is a company with a $31$ December financial year$-$end. You are presented with the following extracts from the financial statements of Milkwood Limited for the $31$ December $2023$ financial year.STATEMENT OF FINANCIAL POSITION AS AT $31$ DECEMBER $2023$ASSETSNon$-$current assets$8786083($Total Non$-$current Assets $2023)9924083($Total Non$-$current Assets $2022)$PPE $-$ Land Note $21200000(2023)1200000(2022)$PPE $-$ Office building Note $24514583(2023)4789583(2022)$PPE $-$ Office equipment Note $21397500(2023)1612500(2022)$PPE $-$ Vehicles Note $21674000(2023)2322000(2022)$Current assets$116030($ Total Current Assets $2023)97800($Total Current Asets $2022)$Trade receivables Note $376250(2023)55200(2022)$Prepaid expenses Note $439780(2023)42600(2022)$TOTAL ASSETS$8902113($TOTAL ASSETS $2023)10021883($TOTAL ASSETS $2022)$LIABILITIES AND EQUITY? $(2023)3835606(2022)$Share capital$100000(2023)100000(2022)$Retained earnings? $(2023)3735606(2022)$Non$-$current liabilities? $(2023)5975690(2022)$Long$-$term borrowings$5400000(2023)5600000(2022)$Deferred tax liability? $(2023)375690(2022)$Current liabilities? $(2023)210587(2022)$Trade payables$130456(2023)125365(2022)$Income received in advance Note $4120000(2023)80000(2022)$Current tax payable Note $5?(2023)5222(2022)$TOTAL EQUITY AND LIABILITIES$8902113(2023)10021883(2022)$Notes:$1.$Milkwood Limited reported a profit before tax of R$2265483.$ The profit before tax figure includes the following:$-$Dividends receivedR$25200-$Interest receivedR$5250-$Donations made to non$-$registered charity organisationsR$20000-$Traffic fine paidR$2500-$Depreciation?$2.$You can assume that no PPE assets were bought or sold during the $2023$ financial year. The following information relating to Milkwood Limiteds PPE assets is avail$-$able:PPE $-$ Land $($ PPE asset$)$R$1200000($ Purchase price$)1$ June $2020($ Purchase date$)$None $($ Capital allowance in terms of Income Tax Act$)$PPE $-$ Office building $($ PPE asset$)$R$5500000($ Purchase price$)1$ June $2020($ Purchase date$)$None $($ Capital allowance in terms of Income Tax Act$)$PPE $-$ Office equipment $($ PPE asset$)$R$2150000($ Purchase price$)30$ June $2020($ Purchase date$)20\%**($ Capital allowance in terms of Income Tax Act$)$PPE $-$ Vehicles $($ PPE asset$)$R$3240000($ Purchase price$)31$ July $2021($ Purchase date$)25\%****$ Not apportioned for part of a year$\mathrm{.}3.$The $2023$ trade receivables are shown net of allowance for doubtful debts of R$9350.$ No allowance was raised in $2022.$ SARS allows an allowance of $25\%$ per annum$\mathrm{.}4.$The income received in advance is taxed in the year of receipt and the prepaid expenses are deductible in the year of payment$\mathrm{.}5.$Milkwood Limited provided for a tax expense of R$5222$ in their $2022$ financial state$-$ments. The tax assessment for the $2022$ financial year$-$end was received during $2023$ and showed that Milkwood Limited had an assessed loss of R$25656\mathrm{.}6.$There are no other differences between accounting profit and taxable profit; otherthan those evident from the information provided$\mathrm{.}7.$ Assume all amounts to be material$\mathrm{.}8.$ The income tax rate is $27\%.$REQUIRED:Prepare all the notes relating to tax expense in Milkwood Limiteds $31$ December $2023$ annual financial statements to comply with the International Financial Reporting Standards.The tax rate reconciliation should be presented in currency.Accounting policies are not required.Show all workings and refer to amounts where applicable.Round all answers to the nearest Rand.$(43$ marks$)$