FAC3761 ASSIGNMENT 1 – SEMESTER 1 OF
2020
(a) Calculation of the correct profit before tax in the statement of profit or loss &
other comprehensive income of Gin Ltd for the year ended 30 June 2019
R
Provisional profit before tax 450 000
Profit on the sale of machinery [1 225 000 − (1 200 000 − 432 000)] 457 000
Change in accounting estimate (𝑖) 10 000
Cost of Sales (15 200 − 5 000) (10 200)
Corrected Net Profit 906 800
Calculations
i. Change in accounting estimate
R
(320 000 − 128 000 − 30 000) 54 000
Depreciation after change: [ ]
3 64 000
Depreciation as calculated (192 000 − 128 000)
Change in accounting estimate 10 000
, (b) Calculation of deferred tax in the statement of financial position of Gin Ltd for
the years ended 30 June
Carrying Tax Base Temporary Deferred
Amount Difference Tax Asset /
Liability &
28%
2019 R R R R
Delivery Vehicles [(𝑖𝑖𝑖)& (𝑖𝑣)] 138 000 80 000 58 000 (16 240)
Prepaid Expenses 80 000 - 80 000 (22 400)
Deferred Tax Liability 138 000 (38 640)
2018 Carrying Tax Base Temporary Deferred
Amount Difference Tax Asset /
Liability &
29%
Machinery (𝑖) 960 000 900 000 60 000 (17 400)
Delivery Vehicles [(𝑖𝑖)& (𝑖𝑖𝑖)] 192 000 160 000 32 000 (9 280)
Inventory 110 450 95 250 15 200 (4 408)
Assessed Loss - 516 000 (516 000) 149 640
Deferred Tax Asset (408 800) 118 552
Calculations
i. Carrying Amount – Machinery (2018) = (1 200 000 − 240 000)
= 𝑹𝟗𝟔𝟎 𝟎𝟎𝟎
ii. Carrying Amount – Vehicles (2018) = (320 000 − 128 000)
= 𝑹𝟏𝟗𝟐 𝟎𝟎𝟎
iii. Tax Base – Vehicles
R
Cost 320 000
320 000 (160 000)
Accumulated Wear & Tear – 30 June 2018 ( 4 ∗ 2)
Carrying amount – 30 June 2018 160 000
320 000 (80 000)
Wear & Tear ( 4 )
Tax Base 80 000
iv. Carrying amount – Delivery Vehicles (2019)
= (320 000 − 192 000 + 10 000)
= 𝑹𝟏𝟑𝟖 𝟎𝟎𝟎
2020
(a) Calculation of the correct profit before tax in the statement of profit or loss &
other comprehensive income of Gin Ltd for the year ended 30 June 2019
R
Provisional profit before tax 450 000
Profit on the sale of machinery [1 225 000 − (1 200 000 − 432 000)] 457 000
Change in accounting estimate (𝑖) 10 000
Cost of Sales (15 200 − 5 000) (10 200)
Corrected Net Profit 906 800
Calculations
i. Change in accounting estimate
R
(320 000 − 128 000 − 30 000) 54 000
Depreciation after change: [ ]
3 64 000
Depreciation as calculated (192 000 − 128 000)
Change in accounting estimate 10 000
, (b) Calculation of deferred tax in the statement of financial position of Gin Ltd for
the years ended 30 June
Carrying Tax Base Temporary Deferred
Amount Difference Tax Asset /
Liability &
28%
2019 R R R R
Delivery Vehicles [(𝑖𝑖𝑖)& (𝑖𝑣)] 138 000 80 000 58 000 (16 240)
Prepaid Expenses 80 000 - 80 000 (22 400)
Deferred Tax Liability 138 000 (38 640)
2018 Carrying Tax Base Temporary Deferred
Amount Difference Tax Asset /
Liability &
29%
Machinery (𝑖) 960 000 900 000 60 000 (17 400)
Delivery Vehicles [(𝑖𝑖)& (𝑖𝑖𝑖)] 192 000 160 000 32 000 (9 280)
Inventory 110 450 95 250 15 200 (4 408)
Assessed Loss - 516 000 (516 000) 149 640
Deferred Tax Asset (408 800) 118 552
Calculations
i. Carrying Amount – Machinery (2018) = (1 200 000 − 240 000)
= 𝑹𝟗𝟔𝟎 𝟎𝟎𝟎
ii. Carrying Amount – Vehicles (2018) = (320 000 − 128 000)
= 𝑹𝟏𝟗𝟐 𝟎𝟎𝟎
iii. Tax Base – Vehicles
R
Cost 320 000
320 000 (160 000)
Accumulated Wear & Tear – 30 June 2018 ( 4 ∗ 2)
Carrying amount – 30 June 2018 160 000
320 000 (80 000)
Wear & Tear ( 4 )
Tax Base 80 000
iv. Carrying amount – Delivery Vehicles (2019)
= (320 000 − 192 000 + 10 000)
= 𝑹𝟏𝟑𝟖 𝟎𝟎𝟎
