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The Roasting House Limited is a company that roasts and distrbules top quality local coffee. The following information relates to the year ending 31 December
The Roasting House Limited is a company that roasts and distrbules top quality local coffee. The following information relates to the year ending 31 December 2oxk: The profit before tax for the cument year has been correcty calculated at C963000 The following notes support the trial balance: 1) Total wear and tear on both vehicles and equipment for the year of assessment is C306 000 . 2) An item of equipment (not the iem impaired) was sold during the year. The depreciation on this equipment is included in the C342. 000 depreciaton above. The capital profit realised was C216 000. It originally cost C180 000, had a cacrying amount of C144 000 and a tax base of C162 000 on the date of sale. Chapter 5 QAAP: Graded Questions Txabsh varises types and eurrent income taxation 3) The prolit on sale of vehicles relates to a vehicle that was sold for C414000 and had originally cost C1440 000. Total capital allowances claimed to date on the vehicle are C720 000 (up to and including the 208 financial period). 4) Of the donations of C144 000, C54 000 are not deductible and C90 000 are deductible for tax purposes. 5) The 207 tax assessment reflected an assessed tax co taxable proft of C421 200. The current income tax expense provided in 20x7 was CA05 200. 6) The first provisional tax payment was made on 31 March a0xs on an estimated taxable income of C1 060000 . The second provisional tax payment was made on 31 December 20x8 on an estimated taxable income of C729 600 . The C20 430 owing to the tax authorities at the beginning of the year was paid on 28 February 208. 7) The corporate income tax rate is 30%. Capital gains are taxed at an inclusion rate of 50%. The company has no assessed capital loss brought forward. 8) There are no differences between accounting prol? and taxable profit other than those evident from the information above. Required: a) Calculate the current income tax for the year ended 31 December 20x8. b) Prepare all the journals relating to curent tax for the year ended 31 December 208
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