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B) On 1 July 2015, Rich Bhd was incorporated. The accounting profit and other relevant information of Rich Bhd for the two years 2016 and
B) On 1 July 2015, Rich Bhd was incorporated. The accounting profit and other relevant information of Rich Bhd for the two years 2016 and 2017 are as follows: 2017 RM 1,500,000 2016 RM 1,200,000 500,000 20,000 20,000 Profit before tax Warranty expense Depreciation expense - plant Gain on sale of plant for accounting Warranty paid Tax depreciation - plant Gain on sale of plant for tax 250,000 30,000 30,000 250,000 500,000 Provision for warranty - carrying amount Provision for warranty - tax base Plant -- carrying amount 60,000 80,000 Plant-tax base 40,000 70,000 The company tax rate is 30%. Required: a) Calculate the current tax of Rich Bhd for year 2016 and 2017 and prepare the required" tax journal entries for each year. (8 marks) b) Calculate deferred tax of Rich Bhd for year 2016 and 2017 and prepare the required tax journal entries for each year. (12 marks)
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