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In: Accounting

QUESTION TWO At 30 June 2017 the statement of Financial Position of Timing Limited included a...

QUESTION TWO

At 30 June 2017 the statement of Financial Position of Timing Limited included a deferred tax liability amounting to a credit balance R11 152. The deferred tax relates to the only item of equipment owned by the company.
The following information is relevant:

Year ended 30 June

2019

R

2018

R

Profit before taxation

282 000

252 000

Wear and tear allowance

40 000

50 000

Depreciation

48 000

48 000

Additional information:

  • The tax base of the equipment at 30 June 2017 was R356 120.
  • The current normal taxation for the year ended 30 June 2018 is paid on 30 June 2019. No other tax payments were made.
  • There were no components of other comprehensive income
  • The normal corporate tax rate for Timing Limited is 40%.

Required:

QUESTION : Show the journals relating to taxation depreciation for the years ended 30 June 2018 and 30 June 2019

Solutions

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ANSWER

Explanation

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