A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the current tax for the year ended 31 May 19.2. Select one: a. R180 000 b. R20 000 c. R100 000 d. R120 000

A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the current tax for the year ended 31 May 19.2. Select one: a. R180 000 b. R20 000 c. R100 000 d. R120 000

Name: A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum a

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5EB: Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of...

See similar textbooks

Similar questions

A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the amount for accounting profit before tax, after depreciation provision for the year ended 31 May 19.2.
A vehicle which cost R100 000 and on which the accumulated depreciation is R60 000 on 31 December 2020 (Year-end) is sold on the 31 March 2021 for R45 000 to Mr Hamilton. It was agreed that he would pay 50% in cash and the balance on the 30 June 2021. Depreciation is written off at 20% per annum using the diminishing balance method. The entity is not registered for VAT. Required: Prepare all the journal entries to record the disposal of the vehicle on 31 March 2021. Journal narrations are required. Document numbers are not required.
Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for depreciation on machinery at 20% per annum according to the straight-line method. The SA Revenue Service allows a wear-and-tear allowance of 25% per annum according to the straight-line method. The year-end of A Ltd is 31 May. Assume a taxation rate of 40%. Assume that A Ltd maintains a profit before provision for depreciation of R500 000 each year. Identify the depreciation amount that would be deducted to arrive at the profit for year for accounting purposes at 31 May 19.2. Select one: a. R20 000 b. R200 000 c. R50 000 d. R250 000
A vehicle which cost R100 000 and on which the accumulated depreciation is R60 000 on 31 December 2020 (year end) is sold on the 31st March 2021 for R45 000 to Mr Hamilton. It was agreed that he would pay 50% in cash and the balance on the 30th June 2021. Depreciation is written off at 20% per annum using the diminishing balance method. The entity is not registered for VAT. Required: Prepare all the journal entries to record the disposal of the vehicle on the 31st March 2021. Journal narrations are required. Document numbers are not required.
DB Company Ltd. Leased a patent for the manufacture of radio components from JK Developers Ltd. On 1 January 2023 for a ten-year period at a loyalty of Sh.50 per component manufactured and sold. Minimum rent was agreed at Sh.4,000,000 per annum and loyalties for each year were paid on 15 February of the following year. Short workings arising in any year were recoverable only within the following two years of operation. The number of components manufactured and sold by each company in each of the five years ended 31 December 2023 were as follows. Year ᎠᏴ Company Ltd. Number of units Number of sold 2017 48,000 46,000 2018 62,000 60,000 2019 72,000 66,000 2020 84,000 82,000 2021 90,000 92,000 Required: Prepare the following accounts in the books of DB Company Ltd. For each of the five years ended 31 December 2023: Page 1 of 3 (a) Royalties payable account (5 marks) ེཌུ (b) Short workings recoverable (5 marks) (c) Royalties receivable account (5 marks) (d) Profit & Loss account (5 marks)
On 1 st January, 2020 Mr. Abid ordered a number of motor vehicles whose cash price was Tk 25,000 and entered into a hire-purchase agreement to pay eight quarterly instalments of Tk 3,300 each. There was no down payment in the agreement. The first payment to be made on 31st March, 2020. The rate of interest is 5% per annum and the vehicles are to be depreciated at 10% per annum on the diminishing balance. Show the journal entries in the book of Mr. Abid for two year ended 31st Dec, 2020.
Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.
On 1 January 2022 (the contract date), Furniture Ltd sold R1 200 000 worth offurniture to a new housing development in Centurion. Furniture Ltd immediatelycredited their sales revenue with the R1 200 000. Included in the sales contract, wasa complementary servicing arrangement in which Furniture Ltd would provide thecustomer with annual servicing of the furniture (in case of any breakages ormanufacturing faults) for a period of three years from the date of the contract.The normal selling price of the furniture without any annual servicing is R1 400 000.The normal price charged to customers for annual servicing is R14 000.REQUIRED:Calculate the amount of revenue that Furniture Ltd should recognise, for thefinancial year end of 30 June 2022, with respect to the transaction above.Ignore the time value of money and VAT.
Aa.15. On December 31, Year 1, Cardinal Company bought some new equipment that cost $25,000 and signed a Note Payable [NP] for $20,000. The remaining amount was paid in cash at the time of the purchase. The NP requires six equal semi-annual payments starting on June 30, Year 2. The principal and the interest expense related to the NP will be completely paid off on December 31, Year 4 as a result of these six equal payments. The note states an interest rate of 8% with semi-annual compounding on the payment dates. Answer the following: 1. What will be the size of each of the six semi-annual payments? $________ 2. How much Interest Expense will appear in Cardinal’s income statement for the year ended Dec. 31, Year 2? $___________ 3. What is the carrying value of the Note Payable in Cardinal’s balance sheet dated Dec. 31, Year 3? $_______
Company A sells a machine to Company B on September 1 for $27,000. The down payment to be paid by Company B is $3,000. Company B must pay monthly minimum payments of $265. 12% interest rate per annum on the unpaid balance is deducted from each payment and the balance is applied to reduce the principal outstanding. Company B makes the following payments to Company A: October 1 November 1 December 1 January 2 Prepare a partial amortization schedule in order to answer the following question. In preparing an amortization schedule, what is the balance at the end of December? Multiple Choice $23,740 None of the other alternatives are correct $22,720 $ 500 $ 500 $1,000 $ 500 $23,480 $22,712
Zigzag Ltd has prepared its draft financial statements for the year ended 30 June 2022. It has included the following transactions in revenue at the amounts stated below. Which of these have been correctly in revenue according to IFRS 15 Revenue from Contracts with Customers? A Agency sales of £300,000 on which Zigzag is entitled to a commission of 10% B Sale proceeds of £40,000 for motor vehicles which were no longer required by Zigzag C Sales of £200,000 on 30June 2022. The amount invoiced to and received from the customer was £230,000, which includes £30,000 for ongoing servicing work to be done by Zigzag over the next two years D Sales of £250,000 on 1 July 2021 to an established customer who, with the agreement of Zigzag, will make full payment on 30 June 2023. Zigzag has a cost of capital of 10%
On 01.10.20X1, TK transfers the annual rent of EUR 7,000 for the business and office space for one year in advance. Which of the following statements regarding business transactions in 20X1 is/are correct? O The annual rent reduces the profit in 20X1 by EUR 7,000. O Another liability must be recognized. O The payout is EUR 7,000 and the expense is EUR 1,750. O An anticipatory deferred item must be formed.