The accountant of Whack Limited has presented you with the following information relating to its financial...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The accountant of Whack Limited has presented you with the following information relating to its financial year ended 31 December 2020: 1. Profit for the year is R400 000. This profit has been correctly calculated and includes the information presented below. 2. A building was sold on 01 January 2020 at a profit of R350 000. The building had originally cost R500 000. Both the accumulated depreciation and accumulated wear and tear amounted to R300 000 on the date of sale. The base cost used for the calculation of capital gains (in terms of the tax legislation) is equal to the original cost. 3. Included in the income for the year is a receipt of R40 000 in the form of a dividend. Dividends received are exempt from tax. 4. Included in the expenses for the year are: • Donations of R150 000, of which R100 000 are not deductible for tax purposes • Fines of R10 000, all of which are not deductible for tax purposes 5. Tax related information: • No temporary differences arose during the year • Income tax is levied at 28% on taxable profits • The inclusion rate for capital gains made by companies is 22.4% Required: 1. Calculate the taxable profit and current income tax for the year ended 31 December 2020. 2. Prepare the taxation note as at 31 December 2020. The accountant of Whack Limited has presented you with the following information relating to its financial year ended 31 December 2020: 1. Profit for the year is R400 000. This profit has been correctly calculated and includes the information presented below. 2. A building was sold on 01 January 2020 at a profit of R350 000. The building had originally cost R500 000. Both the accumulated depreciation and accumulated wear and tear amounted to R300 000 on the date of sale. The base cost used for the calculation of capital gains (in terms of the tax legislation) is equal to the original cost. 3. Included in the income for the year is a receipt of R40 000 in the form of a dividend. Dividends received are exempt from tax. 4. Included in the expenses for the year are: • Donations of R150 000, of which R100 000 are not deductible for tax purposes • Fines of R10 000, all of which are not deductible for tax purposes 5. Tax related information: • No temporary differences arose during the year • Income tax is levied at 28% on taxable profits • The inclusion rate for capital gains made by companies is 22.4% Required: 1. Calculate the taxable profit and current income tax for the year ended 31 December 2020. 2. Prepare the taxation note as at 31 December 2020.
Expert Answer:
Answer rating: 100% (QA)
Calculation of taxable profit for the year ended 31st December 2020 Particulars Amount Amount Profit ... View the full answer
Posted Date:
Students also viewed these accounting questions
-
2. The accounting profit before tax for the year ended 31 December 2020 for Marmadey Sdn Bhd amounted to RM37,000. The draft statement of financial position at 31 December 2020 contained the...
-
The Ethan Company provides you with the following information on December 31, 2015 as it prepares to close its books for the year Accounts Receivable Balance (before write...
-
You are provided with the following information relating to Novatia for the quarter ended 31 December 2019: (1) The VAT exclusive management accounts: Sales 182,500 Sales returns (5,500) 177,000...
-
Write a filter that reads text from an input stream and prints it to an output stream, removing any lines that consist only of whitespace.
-
Read the referenced article that fully describes the OR study summarized in the application vignette presented in Sec. 2.2. List the various financial and nonfinancial benefits that resulted from...
-
In an aligned and continuous glass fiber-reinforced nylon 6,6 composite, the fibers are to carry 94% of a load applied in the longitudinal direction. (a) Using the data provided, determine the volume...
-
Use the following information from the records of Packen Partners to prepare an income statement under the periodic inventory system for the year ended 30 June 2026. Purchases Inventory, 1 July 2025...
-
Clark Paints: The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchasing...
-
Handshake owns and manages a small manufacturing business in Narok town. The following balances have been extracted from his books of account at 31 December 2018: Dr Cr Sh. Sh. Capital 1,711,200...
-
IBS is a global provider of point-of-sale systems and related services that enable businesses to accept electronic payments. As a new hire in the companys international headquarters accounting...
-
TCP connection has been established and client has declared its window size as 20000 bytes. Congestion window is also set at the same size. Server already sent two segments to client. A server sends...
-
In how many ways can a full house of three jacks and a pair of twos be obtained?
-
Find the sum of the first 5 odd positive integers.
-
If a family has six children, in how many ways could the parents have three boys and three girls?
-
Evaluate the expressions in Problems 11-18. \(\sum_{k=2}^{6} k^{2}\)
-
New York license plates consist of three letters followed by three numerals, and 245 letter arrangements are not allowed. How many plates can New York issue?
-
Distinguish between an intranet and an extranet. With examples
-
Provide a few individual examples who revealed what aspects of emotional intelligence?
-
Use the numbers for the alcohol and tobacco category from the table in the Application "Goods with a Large Consumer Surplus Loss from Price Increases" to draw a figure that illustrates the roles that...
-
Change the answer given in the Challenge Solution for the short run rather than for the long run.
-
Because many consumers choose between coffee and tea, the coffee and tea demand functions depend on both prices. Suppose the demand curves for coffee and tea are where \(Q_{c}\) is the quantity of...
Study smarter with the SolutionInn App