Jiki Berhad has the following financial statement as at 31December 2019:

Jiki Berhad

Statement of Financial Position as at 31 December2019

Assets (RM)

Plant (Net) 4,000,000

Research and Development 16,000,000

Cash 5,400,000

Trade Receivable (Net) 5,400,000

Interest Receivable 800,000

Inventory 2,000,000

Total Assets 33,600,000

Liabilities and Shareholders? Equity

Trade Payable 5,920,000

Loan Payable 9,300,000

Provision for warranties 300,000

Deferred tax liability 4,200,000

Share Capital 10,380,000

Retained Earnings 3,500,000

Total Liabilities and Shareholders? Equity33,600,000

Additional Information:

a) Tax laws allow only specific bad debts. The carrying amountin the trade receivable account is after the provision of 10%provision of doubtful debts.

b) Interest receivable is recorded on accrued basis however istaxable only upon receipt.

c) The carrying amount of the plant is after providingaccumulated depreciation of RM 6 million. As at 31 December 2019,total capital allowance given to the plant is RM 7.2 million. Theplant was acquired on 1 January 2017 and the expected useful lifeis 5 years

d) Tax laws allow the research and development costs to bewritten off immediately upon incurred.

e) Tax laws allow the warranty costs to be claimed uponincurred.

f) Tax rate has been reduced from 35% (last year) to 30% (thisyear).

g) The balance in the deferred tax liability account is thecarried forward balance from the last accounting period.

Required:

In accordance with MFRS 112: Income Taxes, calculatethe amount of deferred tax and tax expenses charged in thefinancial statement of Jiki Berhad for the year 2019.

Answer rating: 100% (QA)

Analyzing the given question we will calculate the amount of deferred tax and tax expenses for Jiki Berhad for the year 2019 under the MFRS 112 Income ... View the full answer