The following is an extract from the trial balance of Electoral Limited at 31March 20X4:
ELECTORALLIMITEDEXTRACTFROM TRIAL BALANCE AT 31MARCH20X4
2 000 000
1 200 000
1 000 000
Other operating expenses
2 807 000
Royalties received in advance – 1 April 20X3
Rates and taxes paid in advance – 1 April 20X3
Underprovision of tax in prior years
Deferred taxation – 1 April 20X3
2 000 000
Furniture and fittings
• Revenue comprises:
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:
Rent received frominvestment property
(According to the royalty
agreement, royalties of
CIO 000 are due every
(Electoral Limited holds
1000 C100 12%
debentures, which were
purchased in 20X0)
Interest received from money market
Profit on sale of manufacturing plant
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:
Fee for audit
Fees paid for tax consulting
Depreciation charge for the year
Operating iease payments
Rates and taxes paid
(Includes an amount of C40 000
relating to April andMay 20X4)
(C5 000 is not tax deductible
(C20 000 is not tax deductible)
• 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:
Furniture and fittings
• 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.
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