Part B Prepare all journal entries relating to the machine and the overhaul for the financial year ended 31 December 2017. If no journal entries are required, state that fact and motivate your answer. Current and deferred tax entries are not required. Part C Discuss whether the doubtful debt allowance in the books of Lux Ltd, relating to Silver Ltd, is appropriate at 31 December 2017. Ignore deferred tax. 64 REGENT BUSINESS SCHOOL (RBS) - JULY 2022 BACHELOR OF COMMERCE YEAR 3 - ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE Part D a) Using the information provided in Parts A, B, and C, prepare a deferred tax table in order to calculate the deferred tax asset/liability of Lux Ltd at 31 December 2017. Assume all expenses are deductible for tax purposes when paid, unless stated otherwise. The company tax rate is 28%. In each calculation, indicate whether a deferred tax asset or liability exists, if any. b) Prepare the journal entry on 31 December 2017 to account for deferred tax assuming that a deferred tax liability balance of R400 000 existed at 31 December 2016. QUESTION TWO [22] Baker Ltd has a choice of two projects to invest in. The following details relate to these projects: Required: 4.1 Use the net present value method to determine which project Baker Ltd should choose. Show all workings 4.2 Justify why the net present value method (NPV) is favoured over the payback period. (5) 65 REGENT BUSINESS SCHOOL (RBS) - JULY 2022 BACHELOR OF COMMERCE YEAR 3 - ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE Present value interest factor of R1 per period for n periods, PVIF (i,n)