A manufacturing company bought new equipment on 1 January 2016 for $10 350 000. The equipment had an expected life of 5 years and was being depreciated on a straight line method, with no residual value.

For tax purposes, the Zimbabwe Revenue Authority allowed for Special Initial Allowance (SIA) at the following rates and the company elected to utilise the allowance.:

50% in the first year

25% in the second year

25% in the third year

On 31 December 2019 the company sold the equipment for $2 170 000. The profit before tax for 2018 and 2019 was 12 576 000 and $15 700 000 respectively. The tax rate was 25% throughout the period 2016 to 2019.

Required

1. Calculate the deferred tax assets or liabilities for the years 2016 to 2019
2. Calculate the taxable profit and current tax expense for 2018 and 2019
3. Disclose the relevant information in the company financial statements for the year to 31 December 2019.