LCF Ltd is a company incorporated in Singapore and files tax returns with the Inland Revenue Authority of Singapore. In 2005, LCF Ltd has losses of $300,000 due to a temporary disruption in their factory. Prior to 2005, LCF had profits of $250,000 in 2004 and expected profits in subsequent years to exceed $500,000. Assuming there is no other taxable temporary difference, and LCFs tax rate is 20%, which of the following journal entries best reflect the requirements under FRS 12 that optimizes LCFs tax position?

(a)DR Tax Receivable $60,000 CR Tax income $60,000

(b) DR Tax Receivable $20,000 CR Tax income $20,000 DR Deferred Tax Asset $40,000 CR Tax income $40,000

(c)DR Deferred Tax Asset $60,000 CR Tax income $60,000

(d)DR Tax Receivable $50,000 CR Tax income $50,000