Identify the depreciation amount that would be deducted to arrive at the profit for year for accounting purposes at 31 May 19.2.
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Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for
Identify the depreciation amount that would be deducted to arrive at the profit for year for accounting purposes at 31 May 19.2.
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- 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.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 taxable profit for the year ended 31 May 19.2. Select one: a. R300 000 b. R250 000 c. R80 000A 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.
- 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.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.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 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.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.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 $22,712Pioneer Company is incorporated and starts operations on July 1 of the current year. On October 1 of the current year it acquires goodwill for $13,500. Assuming the company has a December 31 fiscal year-end, what is the maximum CCA for the current year? Choose the correct answer. (Round your answer to the nearest whole dollar.) OA. $1013 B. $340 C. $510 D. $255On 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.