A company has a group of non-current assets that are summarized in its accounting records as shown
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A company has a group of non-current assets that are summarized in its accounting records as shown in Table 12.6.
For tax purposes the asset balance brought forward on 1 January of year 1 is :7,000.
Tax depreciation is available at the rate of 20 per cent per annum on the reducing balance basis. The tax rate is 30 per cent in years 1 and 2 but falls to 20 per cent in years 3 and 4.
Prepare a tabular summary of the tax balances relating to this group of assets over the four years of the example, calculate deferred tax balances for each of the four years and show the effect of deferred tax on the income statement for years 2, 3 and 4.
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Related Book For 
Financial Accounting An International Introduction
ISBN: 9781292102993
6th Edition
Authors: David Alexander, Christopher Nobe
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