The following information concerning Pandemic Limited is presented to you: Pandemic Limited is involved in road construction projects in Gauteng. The company landed a big tender contract for the year ended 28 February 2020, with the local government. The accountant provided you with the following financial information: LIST OF BALANCES FROM STATEMENT OF FINANCIAL POSITION 2020 2019 R R Dr/(or) Dr/(or) Credit losses - Provision for bad debts (10 000) 0 LIST OF BALANCES FROM STATEMENT OF COMPREHENSIVE INCOME 2020 2019 R R Penalties - late payment of UIF 10 000 5 000 Donations - non deductible 7 500 6 500 Credit losses - provision for bad debts 10 000 0 Dividends received (4 500) (6 000) Depreciation - motor vehicles Profit/ (loss) on sale 7 Profit before tax (250 000) (275 000) The assets register lists the following information: Delivery vehicle R250 000 1/03/2018 Purchase Date Truck R150 000 1/06/2019 Purchase Date Toyota Venture R125 000 1/09/2019 Purchase Date Depreciation method - Delivery vehicle 20% on straight line method per annum - Truck 10% on straight line method per annum - Toyota Venture 20% on straight line method per annum Wear and tear - Delivery vehicle 25% on straight line method per annum - Truck 20% on straight line method per annum - Toyota Venture No allowance Delivery vehicle - Sold | R275 000 01/03/2019 ADDITIONAL INFORMATION: The base cost of assets sold is R245 500. South African Revenue Service allows a 10% allowance for provision for bad debts (credit losses). No provision (credit losses) was made in prior years. Profit before tax is calculated after all of the above transactions had been included. A The tax rate for the 2020 tax year is 28 % and for the prior years was 30%. Capital gains are taxed at an inclusion rate of 50% There were no other permanent or temporary differences than those that arose from the above information.

YOU ARE REQUIRED TO: 1 Calculate the taxable income, current tax and deferred tax for Pandemic Limited for the year ended 28 February 2020 (17 Marks) 2. Prepare and disclose the income tax expense and tax reconciliation note to the statement of profit or loss and other comprehensive income of Pandemic Limited for the year ended 28 February 2020. (7 Marks) 3 Calculate the deferred tax balance and the prior year rate change of Pandemic Limited for the year ended 28 February 2020 using the statement of financial position approach. (4 Marks) 4. Show the above-mentioned current tax payable and deferred tax transactions in the general ledger accounts of Pandemic Limited for the year ended 28 February 2020. (2 Marks) COMPARATIVE FIGURES ARE REQUIRED ACCOUNTING POLICIES ARE NOT REQUIRED SHOW ALL CALCULATIONS

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