Artic poles plc financial reports shows profit before tax and profit after charging Depreciation for the three years as follows;

Year profit before tax profit after Depreciation capital

2018             500 ,000             100,000

2019             650 ,000             175,000

2020             800,000             250,000

Allowances

2018             R120,000

2019             R105 000

2020             R75,000

During the year ended 2018 Artic pokes plc purchased machinery for R300,000 and it required Depreciation charge of R100,000 per annum. The machine has an estimated useful life of three(3) years and Depreciation is charged on straight line basis.

Income tax is calculated as 30% of taxable profits. Apart from the above Depreciation and tax allowances there are no other differences between the accounting and taxable profits.

Required

(a,) Draw income statement extract for each of the three years (ignore deferred tax effect)

(b) Draw up incomes statement and statement of financial position extracts for each of the above years accounting for deferred tax.

(C) Outline three examples for each, adjusting and non adjusting events according to IAS 10.

Answer rating: 100% (QA)

C Adjusting events settlements after reporting dat... View the full answer