1. Discuss in detail with relevant illustration on when a deferred tax asset or deferred tax liability should be recognized. (10 marks)
2. Identify and explain items in the statement of financial position that will contribute towards; taxable temporary differences and deferred tax liabilities; and deductible temporary differences and deferred tax assets? (8 marks)
3. Calculate the income tax liability for XS Berhad as at 31 December 2022. (13 marks)
4. Prepare the deferred tax worksheet at 31 December 2022 to determine the deferred tax entries for the year. (14 marks)
5. Record the journal entry for Deferred Tax Asset, Deferred Tax Liability, and income tax expense as at 31 December 2022. (5 marks)

The draft accounts of XS Berhad for the year ended 31 December 2022, which showed a profit before tax of RM1,500,000, included the following items of income and expense: \begin{tabular}{lr} Employee expenses & 400,000 \\ Interest revenue & 120,000 \\ Rent revenue & 80,000 \\ Interest expense & 80,000 \\ Doubtful debts expense & 8,100 \\ Depreciation expense - plant and equipment & 310,000 \end{tabular} The draft statement of financial position at 31 December contained the follow assets and Additional information: i) Interest is assessable for tax on receipt and deductible when paid. ii) Rent revenue relates to a contract where the annual rent is received in advance. Rent is assessable for tax when received. iii) Depreciation for tax purpose on 31 December 2022 is RM300,000. The accumulated depreciation for tax purposes on plant and equipment at 31 December 2022 is RM400,000. iv) Employee expenses for the year include RM20,000 for annual leave and RM40,000 for long-service leave. v) The company tax rate is 25%