IAS $12$ Income taxes differentiate between Permanent and Temporal differences.

a$)$ Required to explain the differences between Temporal and permanent differences and give one example under each $(4$ marks$)$

b$)$ Abani Limited acquired a machinery on $1/1/2020$ for K$200,000.$ The company depreciates the machinery at $25\%$ per annum on cost$.$ The company$`$s tax rate is $35\%$ and that the year end is $\frac{31}{12}.$

The company is entitled to the following capital allowances:

$\backslash$table$[[$Year$,$K$],[2020,100,000],[2021,100000],[2022,0],[2023,0]]$

The company also had the following profits before tax but after depreciation as follows:

$\backslash$table$[[$Year$,$K$],[2020,125,000],[2021,140,000],[2022,175\mathrm{.}000],[2023,192,000]]$

You are required to prepare the profit and Loss account extracts for all the years

a$)$ Ignore Deferred tax

$(6$ marks$)$

b$)$ Include deferred tax

$(6$ marks$)$

c$)$ Statement of Financial position $($extracts$)$ for the years $2020$ to $2023(2$ marks$)$

Total marks $18$ marks