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The year - end of Sweet Cravings Ltd . is 3 1 December 2 0 2 3 . The following information is presented to you:

The year-end of Sweet Cravings Ltd. is 31 December 2023. The following information is
presented to you:
1. The profit before tax for 2023 was R375000 and the taxable income was R396250.
2. Profit before tax for 2023 includes a tax fine of R5000.
3. The statement of financial position as at 31 December 2023 shows an income received in
advance of R10000.
4. The rent expense is paid annually in advance on 1 March. Rent payments were as
follows:
1 March 2022: R42000
1 March 2023: R48000
5. On 1 January 2021, Sweet Cravings Ltd. purchased equipment with a cost price of
R150000. On 30 September 2022 additional equipment to the value of R40000 was
purchased. On 31 March 2023 equipment with a cost price of R15000, originally purchased
on 1 January 2021, was sold for R8750. Depreciation is calculated at 25% per annum on the
straight-line basis.
6. The tax base of equipment was R84000 on 31 December 2023 and R125000 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.

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