FAC3701 ASSESSMENT 1 – SEMESTER 1 OF
2024
(a) Calculation of correct profit before tax for the year ended 31 December 2023
R
Profit before tax 962 000
Sale of delivery vehicle (550 000)
Profit on sale of delivery vehicle (1) 250 000
Prepaid insurance expense (84 000 * ) 70 000
Profit before tax 732 000
Calculations
1. Profit on sale of delivery vehicle
R
Selling price 550 000
Less Carrying amount (300 000)
Cost 500 000
Accumulated Depreciation (200 000)
Profit on sale of delivery vehicle 250 000
(b) Calculation of deferred tax balance for the year ended 31 December 2023
Carrying Tax Base Taxable / Deferred tax
amount (deductible) asset /
temporary (liability) @
differences 27%
R R R R
Delivery vehicles (1) 520 000 487 500 32 500 (8 775)
Allowance for credit losses (2) 35 000 8 750 (26 250) 7 088
Prepaid insurance expenses (3) 70 000 - 70 000 (18 900)
Deferred tax liability – 31 December 2023 76 250 (20 588)
2024
(a) Calculation of correct profit before tax for the year ended 31 December 2023
R
Profit before tax 962 000
Sale of delivery vehicle (550 000)
Profit on sale of delivery vehicle (1) 250 000
Prepaid insurance expense (84 000 * ) 70 000
Profit before tax 732 000
Calculations
1. Profit on sale of delivery vehicle
R
Selling price 550 000
Less Carrying amount (300 000)
Cost 500 000
Accumulated Depreciation (200 000)
Profit on sale of delivery vehicle 250 000
(b) Calculation of deferred tax balance for the year ended 31 December 2023
Carrying Tax Base Taxable / Deferred tax
amount (deductible) asset /
temporary (liability) @
differences 27%
R R R R
Delivery vehicles (1) 520 000 487 500 32 500 (8 775)
Allowance for credit losses (2) 35 000 8 750 (26 250) 7 088
Prepaid insurance expenses (3) 70 000 - 70 000 (18 900)
Deferred tax liability – 31 December 2023 76 250 (20 588)
