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FAC3701 ASSIGNMENT 1 – SEMESTER 1 OF
2022
(a) Calculation of the deferred tax balance

Carrying Tax Base Temporary Deferred Tax
amount Difference Asset
31 December 2020 (Liability)
R R R R
Income received in advance 1 400 000 - (1 400 000) 392 000
Welding machine 4 875 000 3 791 667 1 083 333 (303 333)
Mobile cranes 4 000 000 3 000 000 1 000 000 (280 000)
Assessed Loss - 1 321 000 (1 321 000) 369 880
Deferred Tax Asset (637 667) 178 547


Carrying Tax Base Temporary Deferred Tax
amount Difference Asset
31 December 2021 (Liability)
R R R R
Income received in advance 2 100 000 - (2 100 000) 588 000
Welding machine (1) 3 412 500 2 187 500 1 225 000 (343 000)
Mobile cranes (2) 2 400 000 1 000 000 1 400 000 (392 000)
Deferred Tax Liability 525 000 (147 000)


Calculations

1. Carrying amount – Welding machines
= (4 875 000 − 937 500 − 525 000)
= 𝑅3 412 500

2. Carrying amount – Mobile cranes = (4 000 000 − 1 600 0000 = 𝑅2 400 000




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