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FAC3701 assignment 2 semester 1(quality answers),DISTINCTION GUARANTEED
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This document contains FAC3701 assignment 2 semester 1 2024 question and answers with guaranteed distinction pass
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The tax consequence of the correction of the incorrectly expensed import duties on the annualfinancial statements of BabyCare Ltd for the year ended 28 February 2023, according to the
requirements of IAS 8, Accounting policies, changes in accounting estimates and errors, is as
follows:
1. Decrease in deferred tax expense amounting to R53 156
2. Increase in current tax expense amounting to R56 700
3.
Increase in current tax expense amounting to R53 156
4.
Decrease in current tax expense amounting to R56 700
5.
Increase in deferred tax expense amounting to R42 525
Decrease in expenses (70 000 x 3) 210 000
Increase in expenses due to depreciation (210 000 x 25% x 3/12) (13 125)
Increase in profit before tax 196 875
Increase in current tax expense (196 875 x 27%) 53 156
, The following information regarding the change in the depreciation method of computer
hardware should be disclosed in the notes to the annual financial statements of BabyCare Ltd for
the year ended 28 February 2024, according to the requirements of IAS 8, Accounting policies,
changes in accounting estimates and errors:
a. Identify the change in depreciation method as a change in estimate.
b. Identify the change in depreciation method as an error accounted for prospectively.
c. Nature of the change.
d. Amount of the change in depreciation method in the current year.
e. Effect of the change in depreciation method in future periods.
f. At least two comparative periods in the statement of financial position.
The correct answer is:
1.
b, c, d, e and f only
2.
a, c, d and e only
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