Deferred tax, Taxation

Loren z Limited is a lorry  manufacturer. On 1 January 2011, the company entered into an operating lease (as a lessee) over a company systems. Details of the annual lease rentals, payable in arrears, are as follows:

  • 2011 R0
  • 2012 to 2014 R60 000 per annum
  • 2015 Ro
  • 2016 to 2018 R20 000 per annum

Lorenz Ltd's profit  before tax is R1800 000 in 2011 (correctly calculated). The tax authorities grant a 20%  capital allowance on owned assets but allow a deduction  from taxable profits of the lease payments if the asset is leased.

The normal tax rate is 30%. There are no temporary differences other than those evident from  the information provided. Lorenz Limited satisfies the requirements to raise deferred tax assets.

REQUIRED

Prepare the 2011 journal entries with regard to the above lease agreement.

Draft the following to fully disclose the above lease and its tax effect:

- statement of comprehensive income for the year ended 31 December 2011

-Statement of financial position as at 31December 2011

- Notes to the financial statement for the year ended 31 December 2011

Note that the accounting policy note is required, whist the deferred tax note is not required. Ignore VAT.

Posted Date: 2/27/2013 2:39:51 AM | Location : United States







Related Discussions:- Deferred tax, Assignment Help, Ask Question on Deferred tax, Get Answer, Expert's Help, Deferred tax Discussions

Write discussion on Deferred tax
Your posts are moderated
Related Questions
Dan and Cheryl are married , file a joint return, and have no children. Dan , age 45, is a pharmaceutial salesman and Cheryl, age 42, is a nurse at a local hospital . Dan''s SSN is

Prepare a 2012 Schedule D, including Form 8949 and Form 4797 based on the data provided. Provide a memo summarizing any assumptions made, if any. You do not need to prepare the tax

A and B are unrelated individuals. A forms Newco Inc. on January 2 of the current year by transferring property with a basis of $10,000 and a value of $50,000 for all 50 shares of

Consider the following scenarios: a) Audit fees received by an auditing firm. b) Final ordinary dividend received. Dividends are declared on 31 December and are payable to sh

Amy R. and David T. Smith are married and live at 123 Main Street, Stafford, VA 22554. Dave is self-employed as a web developer and Amy is a commercial refrigeration sales represen

Leonard Anthony Silverman and Janice Marie Silverman, a married couple, live at 17323 Cheryll Parkway Houston, Texas 77056-3672.  Their home telephone number is (713) 937-5629, hom

Rubric Item #12(b) -- Margaret''s Own Interest in Father''s Trust

hi i need solution of following assignment right now Jordan and Cameron are a married couple. Jordan works in IT and earns $180 000 p.a. The company he works for also pays for his


Tax Liability Calculation Morgan (age 45) is single and provides more than 50% of the support of Rosalyn (a family friend), Flo (a niece, age 18), and Jerold (a nephew, age 18). Bo