ABC Ltd has traded for the first time this year and has made taxable in

Prepare the journal entry for the tax liability

Dr Tax expense 140,000

Cr SARS (liability)

Dr SARS (liability) 140,000

Cr Bank

Underprovision

ABC Ltd received an IT34 from SARS and the

tax payable amounted to R156 000 and
payment was made 2 weeks after

Prepare the journal entry for the tax liability

Dr Tax expense 16000

Cr SARS (liability)

Dr SARS (liability) 156000

Cr Bank

Overprovision
 ABC Ltd received an IT34 from SARS and the
tax payable amounted to R126 000 and
payment was made 2 weeks after

Prepare the journal entry for the tax liability

Dr SARS (liability) 14000

Cr Tax expense

Dr SARS (liability) 126000

Cr Bank
s made taxable income of R500 000

(500000*28%)
140,000

140,000

(156000-140000)
16000

156000
 (140000-126000)
14000

126000
ABC Ltd has 200 000 class A shares in issue at the beginning of the year.
ABC Ltd declared an interim dividend of 20 cents per share. Payment happene
ABC Ltd declared a final dividend of 15 cents per share.
All Shareholders are individuals and SA residents.

Interim dividend
Dr Dividends 40000
Cr Shareholders for dividends 34000
Cr SARS - Dividends tax 6000

Dr Shareholders for dividends 34000

Cr Bank 34000

Final dividend

Dr Dividends 30000
Cr Shareholders for dividends 25500
Cr SARS - Dividends tax 4500

Closing entry

Dr Retained Earnings 70000

Cr Dividends 70000

HOW WOULD THE JOURNAL BE DIFFERENT IF THE SHAREHOLDERS WERE SA

No dividends tax will be withheld. No dividend tax is applicable to South Afric

ning of the year.
are. Payment happened 2 months after declaration.

(.20*200000)
(40000*.85)
(40000*.15)

REHOLDERS WERE SA RESIDENT COMPANIES?

plicable to South African resident companies

ABC Ltd sold an asset and made a capital gain of R50 000

Prepare the journal entry for the tax liability

Dr Tax expense 9,334 (50000*66.67%*28%)

Cr SARS liability 9,334
Taxable income 200

Capital profit 100

Inclusion rate 66.67%

Capital profit included 66.67

Taxable income 200

Capital profit included 66.67
Total taxable income 266.67

Tax expense 74.6676(266.67*.28)