The following is an extract from the trial balance of Electoral Limited at 31March 20X4:

The following is an extract from the trial balance of Electoral Limited at 31March 20X4:

ELECTORALLIMITEDEXTRACTFROM TRIAL BALANCE AT 31MARCH20X4

 

Debit

Credit

Gross profit

 

2 000 000

Other income

 

1860 000

Distribution expenses

1 200 000

 

Administration expenses

1 000 000

 

Other operating expenses

2 807 000

 

Interest expense

250 000

 

Royalties received in advance – 1 April 20X3

 

30000

Rates and taxes paid in advance – 1 April 20X3

25 000

 

Underprovision of tax in prior years

5 000

 

Deferred taxation – 1 April 20X3

 

350 000

Manufacturing plant

2 000 000

 

Motor vehicles

1000 000

 

Computer equipment

500 000

 

Furniture and fittings

500 000

 

Additional information:

• Revenue comprises:

 

C

vSaies of ballot papers to the government

7 500 000

Services rendered with respect to election day

5 000 000

• Other income comprises the following items:

 

 

C

Rent received frominvestment property

 

1 500000

Royalties received

(According to the royalty

100 000

 

agreement, royalties of

 

 

CIO 000 are due every

 

 

month)

 

 

(Electoral Limited holds

10 000

 

1000 C100 12%

 

 

debentures, which were

 

 

purchased in 20X0)

 

Interest received from money market

 

140 000

investment

 

 

Profit on sale of manufacturing plant

 

110 000

 

 

1 860 000

• Dividends received:

• Electoral Limited has a 5% share in United FreedomLimited, a company listed on the stock exchange. United Freedom Limited paid an interim dividend of C100 000 to shareholders in September 20X3, and declared a final dividend of C200 000 on 20 March 20X4, to shareholders registered on 31March 20X4.

• Electoral Limited received a dividend of C20 000 from their investment in an unlisted company, Democracy for All (Pvt) Ltd.

• Dividend income is exempt from tax

• The following items of expenditure are included in the distribution, administration and other operating expenses:

Audit fees

 

 

Fee for audit

 

250 000

Expenses

 

12 000

Fees paid for tax consulting

 

10 000

services

 

 

Depreciation charge for the year

 

900 000

Operating iease payments

 

600 000

Rates and taxes paid

(Includes an amount of C40 000

145 000

 

relating to April andMay 20X4)

 

Salaries

 

1000 000

Wages

 

800 000

Traffic fines

 

10 000

Legal fees

(C5 000 is not tax deductible

75 000

Donations

(C20 000 is not tax deductible)

50000

• Property, plant and equipment:

• An item of manufacturing plant was sold during the year at a selling price of C360 000. The plant had cost C300 000 on purchase. At the date of sale the carrying amount of the plant was C250 000 and the tax base was C200 000.

• Wear and tear allowances of Cl 165 000 in total were allowed by the tax authorities for the year. The tax base for the various items of non-current assets at 31March 20X4 were as follows:

 

C

Manufacturing plant

1050 000

Motor vehicles

1200000

Computer equipment

300 000

Furniture and fittings

230 000

• An interim dividend of Cl15 000 was paid in October 20X3. A final dividend of C130000 was declared on 5 April 20X4, payable to shareholders registered on 14 April 20X4.

• The normal tax rate for the year ending March 20X3 was 35% and decreased to 30% for the year ended March 20X4.

Required:

a) Prepare a deferred taxation computation worksheet showing the carrying amount, tax base and temporary difference applicable to each relevant statement of financial position item, indicating the nature of the temporary difference (taxable or deductible) as well as the total movement in deferred taxation for the period.

b) Prepare the statement of comprehensive income of Electoral Limited for the year ended 31March 20X4, in accordance with International Financial Reporting Standards.

c) Prepare the notes to revenue, profit before tax and taxation for the year ended 1March 20X4, in accordance with International Financial Reporting Standards.

Accounting policies are not required.

Comparatives are not required

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