Learning Unit 4: Assignment Question and Suggested Solution.

Activity 1

The following information is given:

Date Information Rand
31 December 20.19 Provision for taxation 20.19 R100 000
Taxation paid – 20.19 100 000
(first and second payment)
28 February 20.20 Tax assessment for 20.19 received after the 93 900
financial statements were drafted
31 December 20.20 Provision for taxation 20.20 80 000
Taxation paid – 20.20 72 000
(first and second payment)

REQUIRED:
Prepare the ledger entries for all relevant accounts for the financial years ended 31
December 20.19 and 31 December 20.20

Income tax expense

Date Contra-Account Amount Date Contra-Account Amount
31 Dec Current tax payable: 31 Dec
20.19 Income tax 100 000 20.19 Profit or loss 100 000

31 Dec 28 Feb Current tax payable:

20.20 Current tax payable 80 000 20.20 Income tax 6 100
(over-provision 20.18)
31 Dec
20.20 Profit or loss 73 900
80 000 80 000

b)
Current tax payable / SARS: Income Tax
31 Dec 28 Feb
20.19 Bank 100 000 20.18 Income tax expense 100 000

28 Feb 31 Dec
20.18 Income tax expense 6 100 20.20 Income tax expense 80 000
31 Dec
20.20 Bank 72 000
31 Dec
20.20 Closing balance c/d 1 900
80 000 80 000
1 Jan
20.21 Opening balance b/d 1 900