Question Two a) On 1 January 2017, Xenon Inc., a company that manufactures electrical appliances made...

 

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Question Two a) On 1 January 2017, Xenon Inc., a company that manufactures electrical appliances made a significant acquisition of a machine at a cost of £300,000. This machine was expected to have a useful life of 8 years and it was to be depreciated using the straight line method at a rate of 20 %p.a. The expected residual value was £ 8,000. The company made a claim for capital allowances in regard to this machine from the revenue authority and this has been provided in the table below. Year 31" December 2018 2019 2020 2021 2022 Profits Before Depreciation and Tax £ 50,500 70,000 80,000 100,000 125,000 Capital Allowances £ 100,000 Required: Prepare the following statements for Xenon Inc. $5,000 34,000 20,000 13,000 The deferred tax account had a debit balance (i.e. deferred tax asset) of £14,000 on 1 January 2018. The corporation tax was 30% i. Statement of Increase/ decrease in deferred tax (or a deferred tax account) for the years 2018 to 2022: Extracts of the Financial Statements of Xenon Inc., for the years 2018 to 2022: Question Two a) On 1 January 2017, Xenon Inc., a company that manufactures electrical appliances made a significant acquisition of a machine at a cost of £300,000. This machine was expected to have a useful life of 8 years and it was to be depreciated using the straight line method at a rate of 20 %p.a. The expected residual value was £ 8,000. The company made a claim for capital allowances in regard to this machine from the revenue authority and this has been provided in the table below. Year 31" December 2018 2019 2020 2021 2022 Profits Before Depreciation and Tax £ 50,500 70,000 80,000 100,000 125,000 Capital Allowances £ 100,000 Required: Prepare the following statements for Xenon Inc. $5,000 34,000 20,000 13,000 The deferred tax account had a debit balance (i.e. deferred tax asset) of £14,000 on 1 January 2018. The corporation tax was 30% i. Statement of Increase/ decrease in deferred tax (or a deferred tax account) for the years 2018 to 2022: Extracts of the Financial Statements of Xenon Inc., for the years 2018 to 2022:

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Xenon Inc Statement of Profit lossExtracts Profit Before Taxation less Taxation Current Taxat... View the full answer