FAC2246 (A1).pdf - FAC2246/2020/1/A Financial Accounting 2 Assignment 1 Compulsory Assignment for May 2020 Examination This paper consists of 9 pages

FAC2246 (A1).pdf - FAC2246/2020/1/A Financial Accounting 2...

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Page 1 of 9 FAC2246/2020/1/A Financial Accounting 2 Assignment 1 Compulsory Assignment for May 2020 Examination This paper consists of 9 pages Due Date: 17 January 2020 Examiner: R. Rajpal Moderator: F. Makunda Marks: 100 INSTRUCTIONS: 1. Answer ALL the questions. 2. Write neatly and legibly. 3. Number your answers correctly. 4. Read the questions thoroughly. 5. Use the allocation of marks for each question as a guideline to how to structure your answer. 6. Only make use of black or blue pen. Typed assignments are allowed. 7. Allow a space of 8 lines between the answers to each question of the assignment. 8. NO Tipp-ex or similar products may be used. Note to Student: In completing this assignment you are encouraged to discuss it with colleagues and fellow students and to read widely on the subject. However, the final product must be your own work. All quotations (from books or the internet) must be properly identified and referenced in your assignment. Any sign of c ollusion (“copying”) with another student may result in both learners being awarded 0% and being prevented from writing examinations. No more than 40% will be awarded for any answer that is just copied from your study guide. You MUST answer all the questions in your own words. [Please be reminded that from 2013 onwards, a sub-minimum of 40% will apply to examinations. Please check your calendar for details.]
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Page 2 of 9 Relevant Tax Rules for Years Ended 31 March 2007 to 2014 Corporate Profits Unless otherwise specified, only the following rules for taxation of corporate profits will be relevant, other taxes can be ignored: • Accounting rules on recognition and measurement are followed for tax purposes. • All expenses other than depreciation, amortisation, entertaining, taxes paid to other public bodies and donations to political parties are tax deductible. • Tax depreciation is deductible as follows: o 50% of additions to property, plant and equipment in the accounting period in which they are recorded; o 25% per year of the written-down value (i.e. cost minus previous allowances) in subsequent accounting periods except that in which the asset is disposed of; o No tax depreciation is allowed on land. • The corporate tax on profits is at a rate of 28%. • No indexation is allowable on the sale of land. • Tax losses can be carried forward to offset against future taxable profits from the same business. Value Added Tax Country X has a VAT system which allows entities to reclaim input tax paid. In country X the VAT rates are: Zero rated 0% Standard rated 14% Exempt goods 0%
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