Question
Below are the financial statement and tax bases for Jaya Bhd as at 31 December 2020: Carrying Amount Tax Base RM000 RM000 Land 15,000 10,000
Below are the financial statement and tax bases for Jaya Bhd as at 31 December 2020:
| Carrying Amount | Tax Base |
| RM000 | RM000 |
Land | 15,000 | 10,000 |
Building | 67,000 | 15,000 |
Plant and Equipment | 104,000 | 56,000 |
Inventory | 13,000 | 13,000 |
Trade Receivable | 5,400 | 6,000 |
Bank | 12,000 | 12,000 |
Trade Payable | 9,000 | 9,000 |
10% Loan | 10,000 | 11,000 |
Provision for Deferred Tax | 8,100 | 8,100 |
Liability 01.01.2020 |
|
|
Revaluation Reserve - Land | 5,000 |
|
Revaluation Reserve Plant and Equipment | 30,000 |
|
Share Capital | 70,000 | 70,000 |
Retained Earnings | 104,300 | 13,900 |
Additional information:
- On 31 December 2020, Jaya revalued land and some of the plant. Fair value of the land and plant were RM5 million and RM30 million respectively, more than its carrying amount.
- Jaya provides for general provision for doubtful debts of 10%. Tax rule recognises bad debts only.
- Jaya raised a loan during the year and recorded it net of transaction costs. The transaction costs are allowable for tax in the year in which the loan is raised.
- Income tax had changed from 30% to 25%.
- Real property gain tax is 5%.
Required:
- Calculate the deferred tax expense for Jaya for the year.
(20 marks) (CLO1:PLO1:C3)
- Prepare the extract of Statement of Financial Position for the year ended 31 December 2020.
(5 marks) (CLO1:PLO1:C4)
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