Question $5[20]$

SMB is a small local corporate entity that operates a transport business in Country X$.$

On $1$ April $2013$ SMB acquired an additional vehicle that qualified for tax depreciation allowances. The vehicle cost R$46,000$ and has an expected useful life of $7$ years with a residual value of R$4,000.$

The appropriate accounting entries for this vehicle have been included in the accounts.

Extracts from SMB$$s financial statements:

Page $6$ of $7$

SMB Statement of financial position as at $31$ March $2013$

R

Non$-$current liability

Deferred tax provision $155,000$

Current liability

Tax payable $30,000$

SMB$$s Statement of profit or loss $($extract$)$ for year ended $31$ March $2014$

R

Revenue$*260,000$

Expenses$**175,000$

Profit before tax $85,000$

SMB Statement of cash flows for year ended $31$ March $2014$

R

Tax paid $33,000$

$*$ Revenue includes a non$-$taxable government grant of R$5,000.$

$**$ Expenses include:

$$ Depreciation charges of R$19,000$ for SMB$$s other non$-$current assets. These assets qualified for tax depreciation allowances of R$22,000.$

$$ Entertaining costs of R$3,000.$

Required:

Calculate SMB$$s corporate income tax due for the year ended $31$ March $2014.$

$($Total for sub$-$question $=10$ marks

Required:

$($i$)$ Calculate the deferred tax balance that will appear in SMB$$s statement of financial position under non$-$current liabilities at $31$ March $2014.$

$($ii$)$ Calculate the amount of income taxes charged to SMB$$s statement of profit or loss for the year ended $31$ March $2014.$

$($Total for sub$-$question $=10$ marks$)$