Below are the extracts of its draft statement of financial position of Crown Entertainment Ltd (CE)...

 

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Below are the extracts of its draft statement of financial position of Crown Entertainment Ltd (CE) as at 31 March 2020: 1. 2. 3. 4. ASSETS Property, plant and equipment - Cost - Accumulated depreciation - Carrying amount Deferred tax asset Accounts receivable Interest receivable LIABILITIES Deferred tax liabilities i Provision for warranty Contract liability 5. 6. 7. Note TBC: To be confirmed 1 623 645 $'000 300 (24) The following information is also relevant. At 31 March 2020, the unused tax depreciation of property, plant and equipment is $215,000. The change in accounts receivable for the year ended 31 March 2020 is due to the loss allowance of $15,000. Such allowance is not allowed until it is proved to be irrecoverable. The related revenue has already been included in taxable profit. Interest receivable of $45,000 is taxed when received. 276 TBC 68 45 TBC 165 8 Provision for warranty is not allowed for tax purposes until the warranty cost are settled. No warranty costs were paid for the year ended 31 March 2020. Contract liability of $8,000 is taxed on cash basis. The deferred tax asset and liability as at 31 March 2019 relate to $30,000 provision for warranty and $10,500 property, plant and equipment respectively. Tax rate is 20% over the entire accounting year ended 31 March 2020. Required: In accordance with HKAS 12 'Income Taxes', prepare for CE for the year ended 31 March 2020, Q4: a schedule using the asset/liability approach to calculate deferred tax asset and liability at the end of the current accounting year Q5: journal entries for deferred tax (7 marks) (3 marks) Q6: a disclosure note showing the movement of deferred tax amounts during the current accounting year (4 marks) Below are the extracts of its draft statement of financial position of Crown Entertainment Ltd (CE) as at 31 March 2020: 1. 2. 3. 4. ASSETS Property, plant and equipment - Cost - Accumulated depreciation - Carrying amount Deferred tax asset Accounts receivable Interest receivable LIABILITIES Deferred tax liabilities i Provision for warranty Contract liability 5. 6. 7. Note TBC: To be confirmed 1 623 645 $'000 300 (24) The following information is also relevant. At 31 March 2020, the unused tax depreciation of property, plant and equipment is $215,000. The change in accounts receivable for the year ended 31 March 2020 is due to the loss allowance of $15,000. Such allowance is not allowed until it is proved to be irrecoverable. The related revenue has already been included in taxable profit. Interest receivable of $45,000 is taxed when received. 276 TBC 68 45 TBC 165 8 Provision for warranty is not allowed for tax purposes until the warranty cost are settled. No warranty costs were paid for the year ended 31 March 2020. Contract liability of $8,000 is taxed on cash basis. The deferred tax asset and liability as at 31 March 2019 relate to $30,000 provision for warranty and $10,500 property, plant and equipment respectively. Tax rate is 20% over the entire accounting year ended 31 March 2020. Required: In accordance with HKAS 12 'Income Taxes', prepare for CE for the year ended 31 March 2020, Q4: a schedule using the asset/liability approach to calculate deferred tax asset and liability at the end of the current accounting year Q5: journal entries for deferred tax (7 marks) (3 marks) Q6: a disclosure note showing the movement of deferred tax amounts during the current accounting year (4 marks)

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Question 1 Deferred tax assetsliability computation Tax rate 20 GL Account Description Book base Tax ... View the full answer