Catering$4$U Limited had a profit before tax of R$500000$ in $2018$ and R$450000$ in $2019$ after taking

into account dividend income of R$15000$ in $2018$ and R$8000$ in $2019.$ The entity declared dividends

of R$5000$ in $2018$ and R$7000$ in $2019.$ There were no unutilised credits brought forward from $2017.$

No amount was owing to or by the SARS $($South African Revenue Services$)$ on the $1$ January $2018.$

No payments were made to or received by SARS in either $2018$ or $2019.$ The rate of secondary tax

on net dividends declared is $12\mathrm{.}5\%.$ The normal tax rate is $30\%.$ The entity recognises deferred tax

assets. There are no other temporary or permanent differences in either year. There are no

components of other comprehensive income.

Required:

$2\mathrm{.}1.$ Calculate the current secondary tax and deferred tax adjustments $($if any$)$ for the $2018$ and

$2019$ financial years. $(7)$

$2\mathrm{.}2.$ Calculate the current normal and deferred tax adjustments $($if any$)$ for the $2018$ and $2019$

financial years $(8)$

$2\mathrm{.}3.$ Prepare the journal entries for the tax related journals for the $2018$ and $2019$ financial

years. $(5)$

$2\mathrm{.}4.$ Prepare the taxation expense disclosure from the notes to the financial statements for the

$2019$ financial year with $2018$ as the comparative.

Answer rating: 100% (QA)

From the question these are the provided figures Profit before tax R500000 in 2018 and R450000 in 20... View the full answer