SHEP II Continuing from the previous year. The following information is relevant for the year ended 31th December 2016. Capital transactions Interest payable On 1t April 2016 the company issued $25,000 of 8% convertible loan stock. Interest is paid in arrears on 30th September and 30th March. Assume that tax relief on interest expense is only given when the interest is paid. Interest receivable On 1th April Shep purchased debentures having a nominal value of $4,000. Interest at 15% pa is reeeivable on 30m September and 30t March. Assume that interest income is not taxed until the cash is actually received. Provision for warranty In preparing the financial statements for the year to 31t Deoember 2016, Shep has recognised a provision for warranty payments in the amount of $1,200. This has been correctly recognised in aceordance with LAS 37 and the amount has been expensed. Assume that tax relief on the warranty cost is only given when the expense is paid. Fine During the period Shep has paid a fine of $6,000. The fine is not tax deductible. Further information The accounting profit before tax for the year was $125,000. Tax is chargeable at a rate of 30%. Required Calculate the corporate income tax liability for the year ended 31st December 2016. Calculate the deferred tax balance that is required in the statement of financial position as at 31th December 2016. Prepare a note showing the movement on the deferred tax acoount and thus calculate the deferred tax charge for the year ended 31st December 2016 Prepare the statement of profit or loss note which shows the compilation of the tax expense for the year ended 31st December 2016. Prepare a note to reconcile the product of the accounting profit and the tax rate to the tax expense for year ended 31December 2016