Susanah, a graduate from UUM, was appointed as an account executive at Every Count Sdn Bhd. During her first week of work, Susanah was asked by Kamla, the finance manager to prepare a report for the company's clients Ruby Bhd. Susanahis required to complete the task within two working days and the information about the clients is presented below.

Client 1: Ruby Bhd- Discussion

Ruby Bhd a listed company that involves in manufacturing and distributing kitchenware in Malaysia. The carrying amount of the assets and liabilities for Ruby Bhd as at 31 December 2019 is presented below.

	Carrying amount RM
Freehold land	500,000
Motor vehicle, net	40,000
Developmental cost	25,000
Trade receivables, net	60,000
Other receivables	20,000
Inventory	8,000
Cash	18,000
Long-term loan	88,000
Deferred tax liability, 1 January 2019	58,500
Trade and other payables	40,000
Penalty payable	3,500
Current tax liability	8,000

Additional information:

1. The freehold land was revalued to RM700,000 on 31 December 2019.

2. A motor vehicle was bought on 3 January 2017 at cost of RM100,000 with the useful life of five years. The capital allowance for the first year is 30% and the subsequent years is 20%.

3. The developmental cost was allowed for tax purposes when the cost incurred in 2018.

4. Other receivables include the current year interest receivable on a fixed deposit of RM5,000.

5. Trade and other payables include an accrual for compensation of RM12,000 to be paid to employees after the financial year ends

6. A penalty of RM3,500 was imposed by the government on the company in current financial year.

7. Taxation was payable at 30% in 2018 and reduced to 25% in 2019.

REQUIRED

(1) Determine the tax base of the assets and liabilities and calculate the temporary difference as at 31 December 2019 for Ruby Bhd. State whether the temporary difference is taxable or deductible.

(2) Calculate the amount of deferred tax asset or liability and tax expense on 31 December 2019 for Ruby Bhd.

(3) Prepare the journal entries to record the income taxes for Ruby Bhd.

4) Discuss to what extend does deferred tax liability meet the definition of liability as set out in the 2018 Conceptual Framework.