Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

DEKO Berhad is in the process to finalized its financial statements. The following is the list of assets and liabilities as at 31 December 2019

DEKO Berhad is in the process to finalized its financial statements. The following is the list of assets and liabilities as at 31 December 2019

Accounts
Carrying amounts (RM)
Property
5,000,000
Equipment
2,000,000
Leasehold land
3,000,000
Prepaid insurance
60,000
Trade receivables
220,000
Accrued dividend
10,000
Unearned rental income
46,000
Trade payable
35,000
Provision for employee benefits
120,000


Additional information:

  1. The balance amount of deductible for tax purposes in the future periods relating to the property is RM4,850,000 and the equipment is RM 2,150,000.
  2. Leasehold land is a non-qualifying asset.
  3. Tax authority use cash basis in determining the income and expenses.
  4. The current tax for the financial year ended 31 December 2019 is RM300,000. No balance for deferred tax and the corporate tax rate is 22 percent.


Required:

(a) Discuss why the tax expense in the statement of profit or loss may not same as tax charge by the tax agency.

(b) Prepare a table showing the tax based, temporary difference and deferred tax for each of the above items as at 31 December 2019.

(c) Determine the amount of tax expense as charged in the statement of profit or loss and the deferred tax liability in the statement of financial position as at 31 December 2019.


Step by Step Solution

3.45 Rating (155 Votes )

There are 3 Steps involved in it

Step: 1

Answer a Tax expenses as per the statement of profit and loss may differ than as charged by tax agen... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Financial Accounting

Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker

10th edition

78025621, 978-0078025624

More Books

Students also viewed these Accounting questions

Question

bisects the angle between them. Illustrate in R2. .VER"

Answered: 1 week ago