Econs Limited was incorporated on 1 January 2017. The profit before tax for the year ended...

  

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Econs Limited was incorporated on 1 January 2017. The profit before tax for the year ended 31 December 2018 amounted to R410 000. The following items are included in the calculation of profit before tax: 2018 $ Depreciation Plant and machinery The Namibian Inland Revenue allows the following deductions: . Wear and tear on plant Additional information: Note 1. During December 2018 rental amounting to $24 000 was received in respect of January 2019. The rental is taxable in the tax year ending 31 December 2018. 30 000 120 000 Note 2. The assessment for the 2017 tax year showed an assessed loss of $160 000. This agreed with the records of the company. Note 3. The company operates in a risky industrial sector and at this early stage of the company's existence there is no certainty of future taxable income against which tax losses can be utilised. Note 4. For the 2017 tax year temporary differences consisted of taxable temporary differences on the plant amounting to $130 000, before taking into account the assessed loss. The cost price of the plant was $300 000 and depreciation on the plant amounted to $30 000 for 2017. Note 5. Deferred tax is provided on all temporary differences according to the comprehensive basis using the financial position approach. The tax rate for both years is 28% Note. 6. Assume that the residual value, useful life and depreciation method of all assets was reviewed at each financial year end and that there were no changes. Required: a. Calculate the current tax expense and deferred tax expense of Econs Limited for 2018(7) b. Disclose the relevant tax notes to the statement of comprehensive income and statement of financial position of Econs Limited for the year ended 31 December 2018. Your answer must comply with the requirements of Generally Accepted Accounting Practice. (5) Only the notes required by IAS 12 must be disclosed. Comparative amounts are not required. Econs Limited was incorporated on 1 January 2017. The profit before tax for the year ended 31 December 2018 amounted to R410 000. The following items are included in the calculation of profit before tax: 2018 $ Depreciation Plant and machinery The Namibian Inland Revenue allows the following deductions: . Wear and tear on plant Additional information: Note 1. During December 2018 rental amounting to $24 000 was received in respect of January 2019. The rental is taxable in the tax year ending 31 December 2018. 30 000 120 000 Note 2. The assessment for the 2017 tax year showed an assessed loss of $160 000. This agreed with the records of the company. Note 3. The company operates in a risky industrial sector and at this early stage of the company's existence there is no certainty of future taxable income against which tax losses can be utilised. Note 4. For the 2017 tax year temporary differences consisted of taxable temporary differences on the plant amounting to $130 000, before taking into account the assessed loss. The cost price of the plant was $300 000 and depreciation on the plant amounted to $30 000 for 2017. Note 5. Deferred tax is provided on all temporary differences according to the comprehensive basis using the financial position approach. The tax rate for both years is 28% Note. 6. Assume that the residual value, useful life and depreciation method of all assets was reviewed at each financial year end and that there were no changes. Required: a. Calculate the current tax expense and deferred tax expense of Econs Limited for 2018(7) b. Disclose the relevant tax notes to the statement of comprehensive income and statement of financial position of Econs Limited for the year ended 31 December 2018. Your answer must comply with the requirements of Generally Accepted Accounting Practice. (5) Only the notes required by IAS 12 must be disclosed. Comparative amounts are not required.

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A Statement showing tarabile income SlNo 1 2 Add as Perogit before tox 3 less q December ... View the full answer