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a) Explain what a temporary difference is and why it attracts deferred tax b) Calculate deferred tax expense/ income and deffered tax asset/ liability for
a) Explain what a temporary difference is and why it attracts deferred tax b) Calculate deferred tax expense/ income and deffered tax asset/ liability for each item for the year ended 30 september 2021.
Wise Ltd is preparing its financial statements for the year end 30 September 2021 and requires assistance with its deferred tax calculation for the following items: i) Insurance of 60,000 was paid on 31 March 2021 covering the year to 31 March 2022. Tax relief was provided in full when the payment was made. ii) At 30 September 2021 a restructuring provision of 800,000 was created. Tax relief is allowable as the associated payments are made. iii) At 30 September 2020 a building has a carrying amount of 2 million and a remaining life of 20 years. The tax written down value at the same date is 1.4 million. During the year ended September 2021 a tax deduction of 400,000 was claimed. Tax is payable at 20% in the years ending 30 September 2020 and 2021Step by Step Solution
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