Statement of Comprehensive Income for XXX for XXX

R
Profit Before tax 250,000.00 A

Adjust permanent differences: - 6,000.00 B

Less: Dividend income - 12,000.00
Add: Non deductible donations 6,000.00
Add: Non deductible fines
Less: Exempt capital profit
Adjust temporary differences: 23,000.00 C
Add: Depreciation 40,000.00
Less: Wear and tear - 25,000.00
Add: Income received in advance (CY) 18,000.00
Less: Income received in advance (PY)
Less: Prepaid expenses (CY) - 10,000.00
Add: Prepaid expenses (PY)
Less: Non capital profit
Taxable Profit 267,000.00 A+B+C
Current Taxation 80,100.00 x 30%
Deferred Tax Computation
Carrying Amount Tax Base
Property Plant and Equipment
Balance 01/01/2012 355,000.00 290,000.00
Depreciation/ Wear and tear - 35,000.00 - 25,000.00

Balance 31/12/2012 320,000.00 265,000.00

Year End Accurals

Balance 01/01/2012 - 15,000.00 -
Revenue received in advance - 15,000.00 -
Expense prepaid

Movements
Balance 31/12/2012 - 18,000.00 -
Revenue received in advance - 28,000.00 -
Expense prepaid 10,000.00 -

Total deferred tax balance

31/12/2011 19500+4500
31/12/2012 16500-8400+3000
Difference Deferred
(TB-CA) Tax

- 65,000.00 - 19,500.00 DTL

10,000.00 3,000.00 Dr deferred tax
- - Cr tax expense
- 55,000.00 - 16,500.00 DTL

15,000.00 4,500.00 DTA

15,000.00 4,500.00 DTA

900.00

18,000.00 5,400.00
28,000.00 8,400.00 DTA
- 10,000.00 - 3,000.00 DTL

- 15,000.00 DTL
- 11,100.00 DTL
 Chapter One
Taxation and Deferred Taxation
Question Bank

1 Calculate the current tax and show related journal entries

Step 1 Calculate the taxable income

Step 2 Calculate current tax

Current Taxation 80,100.00

Deferred Tax Asset 6,900.00

Step 3 Journals

DR Taxation 80,100.00
CR Tax Payable 80,100.00

DR Deferred Tax Asset 6,900.00

CR Deferred Tax (income statement) 6,900.00

2 Show the disclosure for taxation in the SOCI and taxation expense note

Statement of Comprehensive Income for Cheetas Limited for 31 December 2012

R
Profit Before tax 250,000.00 A

Adjust permanent differences: - 6,000.00 B

Less: Dividend income - 12,000.00
Add: Non deductible donations 6,000.00
Adjust temporary differences: 23,000.00 C Deferred Tax Asset
Add: Depreciation 40,000.00 23 000 x 30% = 6 900
Less: Wear and tear - 25,000.00
Add: Income received in advance (CY) 18,000.00
Less: Income received in advance (PY)
Less: Prepaid expenses (CY) - 10,000.00
Add: Prepaid expenses (PY)
Taxable Profit 267,000.00 A+B+C
Current Taxation 80,100.00 x 30%

2 Taxation Note

Current Taxation 80,100.00

Deferred Taxation - 6,900.00
73,200.00

Reconcilliation of taxation:
@30%

Profit before tax 75,000.00

Less dividend income - 3,600.00
Add non deductible donations 1,800.00
Add non deductible fines -
Less capital profit -
73,200.00
 Question 2 Information Provided
Hardax (Pty) Ltd
1 Calculate the deferred income nominal tax at 31 Dec 2011 and 2012 Extracts from the SOFP
2012 2011
Deferred Tax Computation PPE 355,000.00
Carrying Difference Deferred
Tax Base
Amount (TB-CA) Tax Prepaid expense 10,000.00
Property Plant and Equipment Income received in advance 28,000.00 15,000.00
Balance 01/01/2012 355,000.00 290,000.00 - 65,000.00 - 19,500.00 DTL
Depreciation/ Wear and tear - 35,000.00 - 25,000.00 10,000.00 3,000.00 Dr deferred tax tax base balance for 2011 290,000.00
- - Cr tax expense
Balance 31/12/2012 320,000.00 265,000.00 - 55,000.00 - 16,500.00 DTL 2012 depreciation 35,000.00
wear and tear 25,000.00
Year End Accurals
Balance 01/01/2012 - 15,000.00 - 15,000.00 4,500.00 DTA profit before tax 300,000.00
Revenue received in advance - 15,000.00 - 15,000.00 4,500.00 DTA
Expense prepaid 2012 dividend income 5,000.00
900.00
Movements tax rate 30%
Balance 31/12/2012 - 18,000.00 - 18,000.00 5,400.00
Revenue received in advance - 28,000.00 - 28,000.00 8,400.00 DTA
Expense prepaid 10,000.00 - - 10,000.00 - 3,000.00 DTL

Total deferred tax balance

31/12/2011 19500+4500 - 15,000.00 DTL
31/12/2012 16500-8400+3000 - 11,100.00 DTL

2 Statement of Comprehensive Income for Hardax for 2012

R
Profit Before tax 300,000.00 A

Adjust permanent differences: - 5,000.00 B

Less: Dividend income - 5,000.00
Add: Non deductible donations
Add: Non deductible fines
Less: Exempt capital profit
Adjust temporary differences: 13,000.00 C
Add: Depreciation 35,000.00
Less: Wear and tear - 25,000.00
Add: Income received in advance (CY) 28,000.00
Less: Income received in advance (PY) - 15,000.00
Less: Prepaid expenses (CY) - 10,000.00
Add: Prepaid expenses (PY)
Less: Non capital profit
Taxable Profit 308,000.00 A+B+C
Current Taxation 92,400.00 x 30%

Deferred Tax Asset

temporary differences x tax rate

3,900.00

3 Journals

Dr Cr
Deferred Tax 3,900.00
Income Tax 3,900.00
Recording of deferred tax asset

Income Tax 92,400.00

Current Tax 92,400.00
Recording of curent tax

Taxation Note

Current Taxation 92,400.00

Deferred Taxation - 3,900.00
88,500.00

Reconcilliation of taxation:
@30%

Profit before tax 90,000.00

Less dividend income - 1,500.00
Add non deductible donations -
Add non deductible fines -
Less capital profit -
88,500.00

Extract of Statement of Comprehensive Income for year ende

Profit before taxation 300,000.00

Taxation - 88,500.00
Profit 211,500.00