Question
Mariam Kimchi Bhd has determined its accounting profit before tax for the year ended 30 June 2022 to be RM513 400. Included in this profit
- Mariam Kimchi Bhd has determined its accounting profit before tax for the year ended 30 June 2022 to be RM513 400. Included in this profit are the items of revenue and expense shown below.
RM | |
Royalty revenue | 16 000 |
Proceeds on sale of building | 150 000 |
Entertainment expenses | 3 400 |
Depreciation expenses- building | 15 200 |
Depreciation expenses- plant | 45 000 |
Carrying amount of the building sold | 140 000 |
Doubtful debts expense | 8 200 |
Annual leave expenses | 92 000 |
Insurance expenses | 8 400 |
Development expenses | 30 000 |
The company’s draft statement of financial position at 30 June 2022 showed the following assets and liabilities.
Assets | RM | RM |
Cash | 5 000 | |
Account Receivable | 43 000 | |
Less: Allowance for doubtful debts | (8 200) | 34 800 |
Inventory | 63 200 | |
Prepaid insurance | 9 000 | |
Land | 150 000 | |
Buildings | 340 000 | |
Less: Accumulated depreciation | (119 000) | 221 000 |
Plant | 300 000 | |
Less: Accumulated depreciation | (135 000) | 165 000 |
Deferred tax asset (opening balance) | 19 200 | |
667 200 | ||
Liabilities | ||
Account payable | 50 000 | |
Provision for annual leave | 20 000 | |
Deferred tax liability (opening balance) | 12 000 | |
Loan | 280 000 | |
362 000 |
Additional information
- Quarterly income tax instalments paid during the year were:
20 October 2021 | RM36 000 |
28 January 2022 | 35 000 |
28 April 2022 | 36 000 |
with the balance due on 28 July 2022
- The tax depreciation rate for plant (which cost RM300 000, three years ago) is 20%. Depreciation on buildings is not deductable for taxation purposes.
- The building sold during the year had cost RM200 000 when acquired 6 years ago. The company depreciates building at 5% p.a., straight-line. Any gain (loss) on sale of buildings is not taxable (i.e., not deductable)
- During the year, the following cash amount were paid:
Annual leave | RM104 000 |
Insurance | 7 400 |
- Bad debts of RM7 000 were written off against the allowance for doubtful debts during the year
- The RM30 000 spent (and expensed) on development during the year is not deductable for tax purposes until 30 June 2023
- Mariam Kimchi Bhd. has tax losses amounting to RM25 000 carried forward from prior years
- The company tax rate is 30%.
Required:
Determine the balance of any current and deferred tax asset and liabilities for Mariam Kimchi Bhd as at 30 June 2022.
Step by Step Solution
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Step: 1
Tax payable for the year ended 30 June 2022 is RM513400 x 30 RM154020 Quarterly tax instalments paid ...Get Instant Access to Expert-Tailored Solutions
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