Use the information below to answer the required question INFORMATION 1. Plant was purchased on 2 January 2020 for R100 000. The depreciation rate 10%, wear \& tear rate 20%. 2. Equipment was purchased on 30 June 2019 for R80 000 . The depreciation rate 20%, wear \&tear rate 25% 3. Land was Purchased for R200 000 on 1 January 2018. 4. The trade receivable balance as at 31 December 2021 was R35 000 . 5. Interest receivable as at 31 December 2022 is R10 000 6. Dividends receivable balance from wholly owned subsidiary at 31 December 2022 for R7500 7. R400000 is being claimed for residual damages from products sold. It seems likely that the company will have to pay for damages. The damages will be tax deductible. - Applicable tax rate for deferred tax purposes should be 28%. - Land is NOT depreciated and allowed by SARS to have any allowances. - Dividends are not taxable REQUIRED: Calculate deferred tax for the year ended 31 December 2021 and 2022 (26 Marks) 3.1 Use the information below to answer the required question INFORMATION (12 marks) XUZ Ltd purchased a building on 1 October 2021. The following costs were incurred: Original purchase price R4 620000 Admin and overhead R 225000 Transfer/Legal fees R 300000 The building had a residual value of R400 000 and an estimated useful life of 20 years On 31 December 2021, the fair value was R445 000, costs to sell R100 000 and restructuring costs R125 000 and the value in use was R425000. Assume a tax rate of 28% REQUIRED: Calculate the impairment loss for the year ended 31 December 2021 3.2 Prepare the journal for the impairment loss and tax implications, for the impairment loss as identified in 3.1 (5 marks) 3.3 Taking into consideration the impairment of assets, what is the indicator review and what factors the indicator review depends on? Briefly discuss ( 5 marks) 3.4 The relevant cash flows are those cash inflows and outflows that can be directly linked to the use of an asset or cash generating unit. To establish these cash flows, discuss what factors need to be considered? (4 marks) 4.1 Use the information below INFORMATION AB Ltd acquired 85% of the ordinary shares of CF Ltd. The net assets were fairly valued on 1 January 2021 except for machinery that were undervalued by R450 000. The machine was purchased on 1 January 2020 for R1 000000 and had a useful life of 6 years. No adjustments at acquisition for the above matter. Assume a tax rate of 28% REQUIRED: Prepare the journal entries (with narrations) for the year ended 31 December 2022 (10 marks) 4.2 Read the information below: INFORMATION AB wanted to achieve a 25%GP for each sale completed. Inventory sales between AB and CF Ltd amounted to R1650 000 for the year ended 31 December 2022. Inventory on hand in CF Ltd previously purchased from AB Ltd: R675000(31December2022)R550000(31December2021) Assume a tax rate of 28% REQUIRED: Prepare the journal entries (with narrations) for the year ended 31 December 2022. (10 marks)