Name: Homework IAS 12 Fall 2020 ACCT 421: IFRS Exercise...... Firm A Ltd has determined its accounting profit before tax for the year ended 30 June 2013 to be 256 700. Included in this profit are the items of revenue and expense shown below. Royalty revenue (non-taxable) 8 000 Proceeds on sale of building 75 000 Entertainment expense 1700 Depreciation expense buildings 7600 Depreciation expense - plant 22 500 Carrying amount of building sold 70 000 Doubtful debts expense 4100 Annual leave expense 46 OOO Insurance expense 4 200 Development expense 15 000 19-1 Exercise...... (cont.) E21 500 The company's draft statement of financial position at 30 June 2013 showed the following assets and liabilities: Assets Cash 2 500 Accounts receivable Less: Allowance for doubtful debts (4 100) 17 400 Inventory 31 600 Prepaid insurance 4500 Land 75 000 Buildings 170 000 Less: Accumulated depreciation $52.320) 110 500 Plant 150 000 Less: Accumulated depreciation (62.500) 82 500 Deferred tax asset (opening balance) 9.600 333_609 Liabilities Accounts payable 25 000 Provision for annual leave 10 000 Deferred tax liability Copening balance) 6 000 Loan 140 000 E 181.000 19-86 Name: Homework IAS 12 Fall 2020 ACCT 421: IFRS Additional information A) Quarterly income tax installments paid during the year were: 28 October 2012 28 January 2013 28 April 2013 18 000 17 500 18 000 . b) The tax depreciation rate for plant (which cost 150 000 3 years ago) is 20%. Depreciation on buildings is not deductible for taxation purposes. c) The building sold during the year had cost 100 000 when acquired 6 years ago. The company depreciates buildings at 5% p.a., straight-line. Any gain (loss) on sale of buildings is not taxable (i.e. not deductible). 19-87 Exercise....... (cont.) . d) During the year, the following cash amounts were paid: Annual leave 52 000 Insurance 3 700 . e) Bad debts of 3500 were written off against the allowance for doubtful debts during the year. . f) The 15 000 spent (and expensed) on development during the year is not deductible for tax purposes until 30 June 2014 . g) Firm A has tax losses amounting to 12 500 carried forward from prior years. . h) The company tax rate is 30%. 19-88 Name: Homework IAS 12 Fall 2020 ACCT 421: IFRS Exercise...... (cont.) Required Determine the balance of any current and deferred tax assets and liabilities for Firm A Ltd as at 30 June 2013. Prepare any necessary journal entries. 19-89 Name: Homework IAS 12 Fall 2020 ACCT 421: IFRS Exercise...... Firm A Ltd has determined its accounting profit before tax for the year ended 30 June 2013 to be 256 700. Included in this profit are the items of revenue and expense shown below. Royalty revenue (non-taxable) 8 000 Proceeds on sale of building 75 000 Entertainment expense 1700 Depreciation expense buildings 7600 Depreciation expense - plant 22 500 Carrying amount of building sold 70 000 Doubtful debts expense 4100 Annual leave expense 46 OOO Insurance expense 4 200 Development expense 15 000 19-1 Exercise...... (cont.) E21 500 The company's draft statement of financial position at 30 June 2013 showed the following assets and liabilities: Assets Cash 2 500 Accounts receivable Less: Allowance for doubtful debts (4 100) 17 400 Inventory 31 600 Prepaid insurance 4500 Land 75 000 Buildings 170 000 Less: Accumulated depreciation $52.320) 110 500 Plant 150 000 Less: Accumulated depreciation (62.500) 82 500 Deferred tax asset (opening balance) 9.600 333_609 Liabilities Accounts payable 25 000 Provision for annual leave 10 000 Deferred tax liability Copening balance) 6 000 Loan 140 000 E 181.000 19-86 Name: Homework IAS 12 Fall 2020 ACCT 421: IFRS Additional information A) Quarterly income tax installments paid during the year were: 28 October 2012 28 January 2013 28 April 2013 18 000 17 500 18 000 . b) The tax depreciation rate for plant (which cost 150 000 3 years ago) is 20%. Depreciation on buildings is not deductible for taxation purposes. c) The building sold during the year had cost 100 000 when acquired 6 years ago. The company depreciates buildings at 5% p.a., straight-line. Any gain (loss) on sale of buildings is not taxable (i.e. not deductible). 19-87 Exercise....... (cont.) . d) During the year, the following cash amounts were paid: Annual leave 52 000 Insurance 3 700 . e) Bad debts of 3500 were written off against the allowance for doubtful debts during the year. . f) The 15 000 spent (and expensed) on development during the year is not deductible for tax purposes until 30 June 2014 . g) Firm A has tax losses amounting to 12 500 carried forward from prior years. . h) The company tax rate is 30%. 19-88 Name: Homework IAS 12 Fall 2020 ACCT 421: IFRS Exercise...... (cont.) Required Determine the balance of any current and deferred tax assets and liabilities for Firm A Ltd as at 30 June 2013. Prepare any necessary journal entries. 19-89