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Posted on Jun 03, 2024

The accounting profit before tax for the year ended 31 December 2020 for Marmadey Sdn Bhd amounted to RM37,000. The draft statement of financial position

The accounting profit before tax for the year ended 31 December 2020 for Marmadey Sdn Bhd amounted to RM37,000. The draft statement of financial position at 31 December 2020 contained the following assets and liabilities: Assets 2020 (RM) 2019 (RM) Cash 23,000 19,000 Accounts receivables 24,000 28,000 Allowance for doubtful debts (6,000) (5,000) Rent receivable 5,600 4,800 Motor vehicle 36,000 36,000 Accumulated depreciation motor vehicle (31,500) (22,500) Equipment 200,000 260 000 Accumulated depreciation equipment (120,000) (104,000) Deferred tax asset ? 12,900 Liabilities Accounts payable 31,310 43,000 Provision for annual leave 9,000 12,000 Current tax liability ? 15,200 Deferred tax liability ? 5,490 Additional information: a) The balance amount of deductible for tax purposes in the future periods relating to the equipment is RM110,000 and the motor vehicle is RM4,500. b) The current tax for the financial year ended 31 December 2020 is RM11,115. Quarterly income tax instalments paid during the year were: 31 March 2020 RM3,900 30 June 2020 RM3,800 30 September 2020 RM3,700 c) The tax agency uses cash basis in determining the income and expenses. The company tax rate for 2020 is 30%. Required: i. Determine the balance of deferred tax assets and/or liabilities for Marmadey Sdn. Bhd. as of 31 December 2020 by individual items and in total amount. (6 marks) 3 ii. Prepare any necessary journal entries and calculate the current tax liability accrued as at 31 December 2020. (4 marks) iii. Temporary differences arise when the carrying value of an asset or liability differs from its tax base. Explain the differences between temporary differences and tax base. image text in transcribed

2. The accounting profit before tax for the year ended 31 December 2020 for Marmadey Sdn Bhd amounted to RM37,000. The draft statement of financial position at 31 December 2020 contained the following assets and labilities: Assets Cash Accounts receivables Allowance for doubtful debits Rent receivable Motor vehicle Accumulated depreciation - motor vehicle Equipment Accumulated depreciation equipment Deferred tax asset 2020 (RM) 23.000 24,000 (6,000) 5,600 36,000 (31,500) 200,000 (120,000) 2 2019 (RM) 19,000 28,000 (5,000) 4.800 36,000 (22500) 260 000 (104.000) 12.900 Liabilities Accounts payable Provision for annual leave Current tax liability Deferred tax liability 31,310 9,000 ? 2 43,000 12,000 15,200 5,490 Additional information: a) The balance amount of deductible for tax purposes in the future periods relating to the equipment is RM110,000 and the motor vehicle is RM4,500. The current tax for the financial year ended 31 December 2020 is RM11.115. Quarterly income tax instalments paid during the year were: b) 31 March 2020 30 June 2020 30 September 2020 RM3.900 RM3,800 RM3.700 c) The tax agency uses cash basis in determining the income and expenses. The company tax rate for 2020 is 30%. Required: Determine the balance of deferred tax assets and/or liabilities for Marmadey Sdn. Bhd. as of 31 December 2020 by individual items and in total amount. (6 marks) IL Prepare any necessary journal entries and calculate the current tax liability accrued as at 31 December 2020. (4 marks) il. Temporary differences arise when the carrying value of an asset or liability differs from its tax base. Explain the differences between temporary differences and tax base. (3 marks) (Total: 13 Marks) 2. The accounting profit before tax for the year ended 31 December 2020 for Marmadey Sdn Bhd amounted to RM37,000. The draft statement of financial position at 31 December 2020 contained the following assets and labilities: Assets Cash Accounts receivables Allowance for doubtful debits Rent receivable Motor vehicle Accumulated depreciation - motor vehicle Equipment Accumulated depreciation equipment Deferred tax asset 2020 (RM) 23.000 24,000 (6,000) 5,600 36,000 (31,500) 200,000 (120,000) 2 2019 (RM) 19,000 28,000 (5,000) 4.800 36,000 (22500) 260 000 (104.000) 12.900 Liabilities Accounts payable Provision for annual leave Current tax liability Deferred tax liability 31,310 9,000 ? 2 43,000 12,000 15,200 5,490 Additional information: a) The balance amount of deductible for tax purposes in the future periods relating to the equipment is RM110,000 and the motor vehicle is RM4,500. The current tax for the financial year ended 31 December 2020 is RM11.115. Quarterly income tax instalments paid during the year were: b) 31 March 2020 30 June 2020 30 September 2020 RM3.900 RM3,800 RM3.700 c) The tax agency uses cash basis in determining the income and expenses. The company tax rate for 2020 is 30%. Required: Determine the balance of deferred tax assets and/or liabilities for Marmadey Sdn. Bhd. as of 31 December 2020 by individual items and in total amount. (6 marks) IL Prepare any necessary journal entries and calculate the current tax liability accrued as at 31 December 2020. (4 marks) il. Temporary differences arise when the carrying value of an asset or liability differs from its tax base. Explain the differences between temporary differences and tax base. (3 marks) (Total: 13 Marks)