Donohoe plc prepares its financial statements to 31 December each year. Profit before taxation for the year ended 31 December 2021 was 297,700. Taxable profit for the same period was 72,000.

The following data relates to the year ended 31 December 2021:

1. The balance on the accounts receivable is 125,000 before a general allowance for doubtful debts of 16%.

2. In August 2021 Donohoe plc opened a deposit account with Tracker Bank. Deposit interest accrued at 31 December 2021 amounted to 123,000. This interest was credited to Donohoe plcs profit or loss in the year ended 31 December 2021 but will not be received until February 2022.

3. A tax loss of 40,000 was carried forward at the end 31 December 2020

4. On 26 September 2016 Donohoe plc purchased a freehold building for 129,000. This building has been revalued during 2021 to 321,000. This building is accounted for under IAS 16, Property, Plant and Equipment.

5. At 31 December 2020 Donohoe plc had plant and equipment which had a cost of 800,000. Depreciation to that date amounted to 300,000 while capital allowance amounted to 235,000. During 2021, depreciation of 144,000 was charged on this plant and equipment and capital allowances of 98,000. This plant and equipment is accounted for under IAS 16, Property, Plant and Equipment.

6. Donohoe plcs defined benefit pension plan is managed by a pension fund company based in Tralee. Donohoe plc paid 34,000 into the pension plan in March 2022. This was treated as an accrued pension expense in computing accounting profit for the year ended 31 December 2021.

7. Deferred income of 27,500 was received on 18^th November 2021. Donohoe plc will not undertake the work corresponding to the 58,000 deferred income until January 2022.

The following trial balance extract relate to Donohoe plc at 1 January 2021:

Retained earnings at 1 January 2021 432,000

Revaluation surplus at 1 January 2021 321,000

Deferred tax (liability) at 1 January 2021 21,000

The corporation tax rate is expected to be 25% for the foreseeable future. Donohoe plc accounts for its deferred tax in accordance with IAS 12, Income Taxes.

Required

Prepare a table showing the carrying values, tax bases and temporary differences for each of the items above for the year ended 31 December 2021.

Show the relevant extracts of Donohoe plcs Statement of Profit or Loss and Other Comprehensive Income and Statement of Financial Position for the year ended 31 December 2021.

Outline the arguments against discounting deferred tax assets and liabilities.