- May 21, 2021 at 6:12 pm #621358Nhlanhla@05Member
- Topics: 5
- Replies: 2
Hi, could you please assist me with the following scenario?
On 30 June 2018, SAGB sold five of their old Boilers used for Sterilization and Sanitation, to MJaivo Brewery, for a total cost of R750 000. SAGB and MJaivo Brewery agreed in writing that MJaivo Brewery will pay this amount, without interest, not later than 18 months from the day of the agreement. SAGB paid R300 000 for each Boiler. The Boilers were bought and ready for use when SAGB commenced business. At that time the useful life of the Boilers was confirmed to be 15 years. A non-proportional wear and tear allowance of 5% is granted by the South African reserve bank on the machines.
1.Implications on the deferred tax balance calculation
2.Implications on the current tax calculation
3.Temporary difference or permanent difference
When were the boilers bought like how do I play with numbers to get to the year of purchase?
so my implications on deferred tax balance calculation are as follows SAGB bought the boilers for 1500000(300k*5) with the useful life of 15 years, the question comes here asking when were the boilers bought and are depreciated at how many years as the year-end as at 31 December 2018? so I can calculate the carrying amount as at year-end
Tax base on 30 Dec 2018 (1500000*5%*??)
temporary difference Asset(boiler)-temporary difference
Loss and scrapping allowance- Permanent difference
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