Super Ltd acquired a plant for R1 000 000 on 1 January 2020. The plant has...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Super Ltd acquired a plant for R1 000 000 on 1 January 2020. The plant has a useful life of 4 years and is assessed as having a zero residual value. Depreciation is provided on the straight-line method. Super Ltd has a legal obligation to dismantle the plant at the end of 4 years. • The estimated future costs of dismantling the plant at 31 December 2023 are R40 000. • The present value (at 1 January 2020) of the future dismantling costs is R27 321 (using a discount rate of 10%). The company uses the cost model to account for property, plant and equipment. Required: Prepare the journal entries (ignoring the effects of taxation) relating to the above-mentioned information for 2020 and 2021 assuming that on 1 January 2021: • Dismantling costs are expected to increase to R60 000 (PV at 1 January 2021 R45 079) QUESTION 2 (10 Marks) Vhembe Limited manufactures and sells lawnmowers online to the public. The company produced a profit before tax of R3 800 000 for the year ended 28 February 2021. Included in the profit before tax are the following items: Dividend income of R200 000 which is exempt from income tax Donations of R100 000 which is non-deductible The income tax rate for the financial year is 30% and there was no temporary difference observed. Required: Calculate current income tax for the year ended 28 February 2021. Super Ltd acquired a plant for R1 000 000 on 1 January 2020. The plant has a useful life of 4 years and is assessed as having a zero residual value. Depreciation is provided on the straight-line method. Super Ltd has a legal obligation to dismantle the plant at the end of 4 years. • The estimated future costs of dismantling the plant at 31 December 2023 are R40 000. • The present value (at 1 January 2020) of the future dismantling costs is R27 321 (using a discount rate of 10%). The company uses the cost model to account for property, plant and equipment. Required: Prepare the journal entries (ignoring the effects of taxation) relating to the above-mentioned information for 2020 and 2021 assuming that on 1 January 2021: • Dismantling costs are expected to increase to R60 000 (PV at 1 January 2021 R45 079) QUESTION 2 (10 Marks) Vhembe Limited manufactures and sells lawnmowers online to the public. The company produced a profit before tax of R3 800 000 for the year ended 28 February 2021. Included in the profit before tax are the following items: Dividend income of R200 000 which is exempt from income tax Donations of R100 000 which is non-deductible The income tax rate for the financial year is 30% and there was no temporary difference observed. Required: Calculate current income tax for the year ended 28 February 2021.
Expert Answer:
Answer rating: 100% (QA)
Answer q1 q2 Date ccount Dr Cr Property plant and equipment PPE 202001... View the full answer
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
Students also viewed these accounting questions
-
A company bought a machine on 1 January 2020 for RM170,000. It is expected to last for 10 years and then be sold for scrap for RM10,000. Usage over the next 10 years is expected to be: Year...
-
Required Prepare General Journal entries to record the following transactions of Billington Company. 2015 Jan. 10, Accepted a $3,000, 60-day, 6% note dated this day in granting a time extension on...
-
On 1 January 2020 Click acquired an asset at its fair value and immediately leased it out to Network for 4 years under the following lease terms: Annual payment $40000 at the beginning of lease...
-
Find or evaluate the integral by completing the square. 3 L= dx x + 4x + 8
-
The owner of Midwest Grocers Warehouse is considering a $ 195,000 installation of a new refrigerated storage room. The storage room has an expected life of 20 years with no salvage value . The...
-
Beginning inventory, purchases, and sales data for watches are as follows: a. Assuming that a perpetual inventory system is used, costing by the FIFO method, determine the cost of goods sold for each...
-
The relation between a bond's coupon rate and yield rate is known to influence a bond's issuance price. Presented below are coupon rates and yield rates for a selection of corporate bonds. Identity...
-
The treasury stock purchased in question 13 is resold by Chen, Inc. for $15,000. What effect does this transaction have on (a) Net income, (b) Total assets, (c) Total paid-in capital, and (d) Total...
-
The following is a list of eligible medical expenses that have not yet been claimed: - December 5 , 2 0 2 1 : $ 6 8 0 - January 2 0 , 2 0 2 2 : $ 1 2 5 - April 1 5 , 2 0 2 2 : $ 5 0 0 - October 2 2 ,...
-
Lang and Thomas, a local CPA firm, has been asked to bid on a contract to perform audits for three counties in its home state. Should the firm be awarded the contract, it must hire one new staff...
-
Task 11 Review each of the seven figures shown in the previous sections, choosing two about which to write a paragraph comparing the data display with Tuftes list of graphical excellence qualities....
-
What are some of the principal exemptions from the sales tax base that are typically found in most state statutes? Explain the rationale of some of these exemptions.
-
On December 31 , the Hill Company had \(\$ 800,000\) in total assets and owed \(\$ 230,000\) to creditors. If the corporation's common stock amounted to \(\$ 400,000\), what amount of retained...
-
What is (are) the basic principle(s) underlying a retail sales tax? How do the state statutes attempt to be faithful to these principles?
-
The base of the sales tax is either sales proceeds or gross receipts. In general, discuss whether the following are included or excluded from the sales tax base: Returns and allowances Bad debts ...
-
Define nexus. What is the minimum nexus standard for sales and use tax purposes? After reviewing the U.S. Supreme Court cases mentioned in this chapter, do you think that the Courts opinion has...
-
! Required information [The following information applies to the questions displayed below.] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000...
-
Fill in each blank so that the resulting statement is true. A solution to a system of linear equations in two variables is an ordered pair that__________ .
-
The following are the financial statements of White and its subsidiary Brown as at 30 September 20X9 The following information is also available: (i) White purchased its ordinary shares in Brown on 1...
-
Purchases of a certain product during July were: Units sold during the month were: Required: Assuming no opening inventories: (i) Determine the cost of goods sold for July under three different...
-
Epsilon is a listed entity. You are the financial controller of the entity and its consolidated financial statements for the year ended 31 March 2009 are being prepared. The board of directors is...
-
Smith \& Sons reports interest expense of \(\$ 90,000\) on its income statement. The beginning and ending balances for interest payable reported on its balance sheet are \(\$ 15,000\) and \(\$...
-
Using the information for the Melville Corporation above, calculate the cash flow from operating activities. Use the following information regarding the Melville Corporation Accounts payable...
-
Using the information for the Melville Corporation above calculate the cash flow from investing activities. Use the following information regarding the Melville Corporation Accounts payable...
Study smarter with the SolutionInn App