1. Company A recorded a profit before tax of $5,000,000 for the year ended 31 December 20X3. Deferred tax liability as of 31 December 20X2 was $30,800. 
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3. 1) On 1 January 20X1. Company A purchased plant and machinery costing $240,000. The useful life of the plant and machinery was eight years, but the capital allowances were to be claimed over a 3-year period. 
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5. 2) Company A completed the development phase of a new drug on 1 January 20X2, which amounted to $140,000 and was deemed to have an economic useful life of seven years for accounting purposes. The amortized expenditures were not deductible for tax purposes. 
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7. 3) Unearned revenue represents the advance cash receipt from customers for service fees that have not been provided yet and has a credit balance of $13,000 at the end of the year. Service fees were taxable during the year when the proceeds were received. 
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9. ■ Disallowed items were as follows:
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11. Entertainment expenses Donations to non-qualifying charities Disallowed transport expenses $15,000 $10,000 $9,000
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13. ■ Tax-exempt income and reliefs granted Tax-exempt income Double-deductions $34,000 $105,000 
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15. Required: 
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17. (a) Prepare the tax computation for the year ended 31 December 20X3 based on the above information. The income tax rate is 20% and remains constant across all years. 
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19. (b) Determine the ending balance of deferred tax liability and deferred tax assets on 31 December 20X3 and income tax expenses for the year 20X3.