, a) Calculation of Dividends Tax Payable
Description Calculation Amount (R)
Total dividends declared Given 470 000
Mrs Smith (20%) +
Liable shareholders 45%
Mr Samuel (25%)
Dividends subject to tax R470 000 × 45% 211 500
Dividends tax payable to
R211 500 × 20% 42 300
SARS
b) Motivation for Insurance Payment as an Asset
Asset Criteria (Conceptual
Application to Style Ltd's Insurance Payment
Framework 2018)
Right & Potential to produce The prepayment grants the right to receive insurance protection (1 Jan–30
economic benefits Sep 2026), which indemnifies the company against future financial losses.
Style Ltd is the named beneficiary and dictates the policy's terms, including
Control
the ability to maintain it or cancel it for a potential refund.
Description Calculation Amount (R)
Total dividends declared Given 470 000
Mrs Smith (20%) +
Liable shareholders 45%
Mr Samuel (25%)
Dividends subject to tax R470 000 × 45% 211 500
Dividends tax payable to
R211 500 × 20% 42 300
SARS
b) Motivation for Insurance Payment as an Asset
Asset Criteria (Conceptual
Application to Style Ltd's Insurance Payment
Framework 2018)
Right & Potential to produce The prepayment grants the right to receive insurance protection (1 Jan–30
economic benefits Sep 2026), which indemnifies the company against future financial losses.
Style Ltd is the named beneficiary and dictates the policy's terms, including
Control
the ability to maintain it or cancel it for a potential refund.
