Fac3701 Assignment 2 Semester 1 2024 [ Complete Answers] DISTINCTION GUARANTEED

The tax consequence of the correction of the incorrectly expensed import duties on the annual
financial statements of BabyCare Ltd for the year ended 28 February 2023, according to the
requirements of IAS 8, Accounting policies, changes in accounting estimates and errors, is as
follows:
1. Decrease in deferred tax expense amounting to R53 156
2. Increase in current tax expense amounting to R56 700
3.

Increase in current tax expense amounting to R53 156


4.
Decrease in current tax expense amounting to R56 700

5.

Increase in deferred tax expense amounting to R42 525


Decrease in expenses (70 000 x 3) 210 000
Increase in expenses due to depreciation (210 000 x 25% x 3/12) (13 125)
Increase in profit before tax 196 875

Increase in current tax expense (196 875 x 27%) 53 156