Company X seeks your assistance to determine its tax expense under IAS 12 Income Taxes. The accountant has provided you with a schedule below of carrying amounts of assets and liabilities and information relating to the tax treatments of the items. The accountant also provided the tax computation for the financial year ended 31 December 20x3. Complete the schedule. Indicate clearly whether a taxable or deductible temporary difference exists for each item. If the temporary difference is not to be recognized under IAS 12, state clearly.

Required
1. Determine the tax expense of Company X for the year ended 31 December 20x3. Tax rate for 20x2 is 22%.
Prepare the journal entry.
2. Perform an analytical check of the tax expense.

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Carrying amount. Tax base.. 1. Construction Work-in-progress Construction costs to date... Construction profit to date. Construction work-in-progress. 3. Fixed assets Net book value. Tax base.. 2. Provision for restructuring costs Carrying amount.. Tax base.. 4. Interest receivable Carrying amount. Tax base.. Schedule of balances as at 31 December 20x3 Amount 5. Rent receivable Carrying amount.. Tax base.. Item 6. Unearned income Carrying amount.. Tax base.. $12,000,000 700,000 $12,700,000 $12,700,000 Tax treatment $300,000 Construction profit is taxed at the point of completion of project $150,000 Restructuring costs are not deductible for tax purposes Capital allowances were fully claimed in the first year of purchase. Original cost was $500,000. $70,000 Interest is tax-exempt $80,000 Rental income is taxed in the period when earned $90,000 Unearned income is taxed at the point of receipt