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.
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.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 5EA: Steele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following...
Related questions
Question
A Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for
Identify the amount for accounting profit before tax, after depreciation provision for the year ended 31 May 19.2.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College