4th Term notes for Financial Accounting 389. All the things you need to know and understand to pass Financial Accounting 389. These summaries also show how to fill in financial statements and so forth. These summaries are here to help you pass Financial Accounting.
Current liabilities:
Income received in advance Amount calculated in deferred tax note.
STATEMENT OF COMPREHENSIVE INCOME:
Profit before tax
(Income tax expense) 2
Profit after taxation
• IRIA – year received xx
- next year (xx)
• PE – year paid (xx)
- next year xx
WEAR AND TEAR CP x % No residual For the whole year
RECOUPMENT SP -TB TB = CP – W&T SP limited to CP
CAPITAL GAINS (SP – CP) x 80% …. X 20% - Tax recon
NOTES FOR THE STATEMENT OF FINACIAL POSITION:
1. INCOME TAX EXPENSE:
Main components of income tax:
Current tax expense
Deferred tax expense/(income)
(Deferred tax income relating to increase in tax rate end of the year)
Tax rate reconciliation
Accounting profit Profit before tax
Tax at the standard rate of 28% Profit x 0,28
Non-taxable income:
Profit on the disposal of equipment
(Dividends received)
(Capital gains) Rxx X 20% X 28% Amount x 0,28
Non-deductible expenses: tax penalty paid
(Tax allowance received)
Deferred tax expense relating to an increase in tax rate at the beginning of the year
(Deferred tax (income) relating to increase in tax rate end of the year)
Non-deductible fines
Non-deductible donations
Income tax expense
, 2. DEFERRED TAX:
Analysis of temporary differences:
Tax allowances on PPE
Prepaid expenses
(Income received in advance)
(Capital allowances)
(Tax loss)
(Provision for leave pay)
Deferred tax liability/(asset)
CALCULATIONS:
1. CURRENT TAX:
Profit/(loss) before taxation
Depreciation - acc
(Wear-and-tear – tax)
(Profit on disposal of equipment – acc)
Loss on disposal equipment - acc
Capital gain (80%) - tax
Recoupment of wear-and-tear - tax
Tax penalty paid - acc
(Tax allowance received – tax)
Insurance premiums paid in advance - tax
(Loss – prior year)
Fines
Donations
Provision for leave pay Previous year – current year
(Dividends received)
Taxable income/(loss)
Current taxation
2. DEFERRED TAX:
CP TB TD DT DT
Asset xx xx xx xx Cr
Prepaid Expense xx - xx xx Cr
IRIA (xx) - (xx) (xx) Dt
Loss 0 xx (xx) (xx) Dt
Insurance xx 0 xx xx Cr
Prov. for leave (xx) 0 (xx) (xx) Dt
Research 0 xx (xx) (xx)
Dt – deductible
If asset is sold it does not come in Deferred tax calculation.
Cr – taxable
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller alettedutoit. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R150,00. You're not tied to anything after your purchase.
