(a) Mushangalimited purchased a specialised machine on 1 January 2015 for
N$10 000 000. Mushanga Limited provides for depreciation on the diminishing
balance method at 20%. The following relates to an error made by MushangaLimited
1. It processed depreciation of N$ 2 000 000 in both 2015 and 2016 (2 years) and N$
1 200 000 in 2017.
2. The error was picked up in 2017 after the current period’s entries had been
processed.
The incometax is 30% and it has been unchanged for manyperiods.
The tax authorities allow the annual deduction of 20% of the cost of the asset
Required:
Provide the correcting journal entries for the current year ended 31 December 2017
(10 marks)
(b) Using the information provided in (a) above but the error wasasfollows:
1. During the current year it was discovered that the specialised machinery purchased in
2017 had in fact been expensed as a special marketing fee instead.
2. The error affected the tax calculations and the forms submi