QUESTION 3 35 Marks Amani Ltd (Amanl) is a leading Manufacturing company which manufactures and sells clay pots in the Northern region of Namibia. The profit before depreciation and tax for the year ended 30 June 2020 is N5360 000. The credit balance of Nth the deferred tax account as at T July 2019 originated as a result of the difference in the accounting treatment of depreciation and treatment for tax purposes of wear and tear allowances on manufacturing equipment. The tax rate was 30% for the past few years. Depreciation is provided at 20% per year on the straight line basis on the cost of all equipment which is used in the manufacturing process. The Inland Revenue Department (IRD) allows a wear and tear allowance of 33 1/3% on the cost of manufacturing equipment in terms of the Income Tax Act The following information appears in the property, plant and equipment register of Amani with regard to manufacturing equipment Date of purchase Cost N$ 1/7/2017 (available for and taken into use on 1/1/2018) 1 200 000 1/10/2019 (available for and taken into use on 1/10/2019) 500 000 Dividends received during the year are as follows: Sana 15 September 2019 22 000 15 April 2020 18 000 The following fines were paid during the year: Traffic offences 1 500 Contravention of the Companies Act 3 500 The current tax owing to the IRD as at 1 July 2019, was paid during the year. STC / dividends tax may be ignored Amani has a loan that was granted by Sansa National Bank. The outstanding amount due to the bank amounts to N$500 000 on 30 June 2020. The full amount is payable on or before 31 December 2020. Amani however started with negotiations on 28 June 2020 to extend the redemption of the loan to 31 December 2021. This request was approved by the bank on 5 July 2020 Marks 17 REQUIRED: 3.1 Determine the tax expense of Amani Ltd for the year ended 30 June 2020 3.2 Present all aspects relating to tax in the financial statements of Amani Ltd and also disclose tax in the notes to the financial statements as at 30 June 2020, to comply with the minimum requirements of the Companies Act and the Statements of Generally Accepted Accounting Practice (IFRS). Comparative figures are not required Total marks 18 35 QUESTION 3 35 Marks Amani Ltd (Amanl) is a leading Manufacturing company which manufactures and sells clay pots in the Northern region of Namibia. The profit before depreciation and tax for the year ended 30 June 2020 is N5360 000. The credit balance of Nth the deferred tax account as at T July 2019 originated as a result of the difference in the accounting treatment of depreciation and treatment for tax purposes of wear and tear allowances on manufacturing equipment. The tax rate was 30% for the past few years. Depreciation is provided at 20% per year on the straight line basis on the cost of all equipment which is used in the manufacturing process. The Inland Revenue Department (IRD) allows a wear and tear allowance of 33 1/3% on the cost of manufacturing equipment in terms of the Income Tax Act The following information appears in the property, plant and equipment register of Amani with regard to manufacturing equipment Date of purchase Cost N$ 1/7/2017 (available for and taken into use on 1/1/2018) 1 200 000 1/10/2019 (available for and taken into use on 1/10/2019) 500 000 Dividends received during the year are as follows: Sana 15 September 2019 22 000 15 April 2020 18 000 The following fines were paid during the year: Traffic offences 1 500 Contravention of the Companies Act 3 500 The current tax owing to the IRD as at 1 July 2019, was paid during the year. STC / dividends tax may be ignored Amani has a loan that was granted by Sansa National Bank. The outstanding amount due to the bank amounts to N$500 000 on 30 June 2020. The full amount is payable on or before 31 December 2020. Amani however started with negotiations on 28 June 2020 to extend the redemption of the loan to 31 December 2021. This request was approved by the bank on 5 July 2020 Marks 17 REQUIRED: 3.1 Determine the tax expense of Amani Ltd for the year ended 30 June 2020 3.2 Present all aspects relating to tax in the financial statements of Amani Ltd and also disclose tax in the notes to the financial statements as at 30 June 2020, to comply with the minimum requirements of the Companies Act and the Statements of Generally Accepted Accounting Practice (IFRS). Comparative figures are not required Total marks 18 35