QUESTION 1 (25 MARKS)

Below are the financial statement and tax bases for Delta Bhd (DB) as at 31 December 2021:

	Carrying Amount	Tax Base
	RM000	RM000
Land	15,000	10,000
Building	67,000	15,000
Plant and Equipment	104,000	56,000
Inventory	13,000	13,000
Trade Receivable	5,400	6,000
Bank	12,000	12,000
Trade Payable	9,000	9,000
10% Loan	10,000	11,000
Provision for Deferred Tax Liability on 1.1.2021	8,100	8,100
Revaluation Reserve - Land	5,000
Revaluation Reserve Plant and Equipment	30,000
Share Capital	70,000	70,000
Retained Earnings	104,300	13,900

Additional information:

i )On 31 December 2021, DB revalued land and some of the plant. Fair value of the land and plant were RM5 million and RM30 million respectively, more than its carrying amount.

ii )DB provides for general provision for doubtful debts of 10%. Tax rule recognises bad debts only.

iii) DB raised a loan during the year and recorded it net of transaction costs. The transaction costs are allowable for tax in the year in which the loan is raised.

iv )Income tax had changed from 30% to 25%.

v )Real property gain tax is 5%.

Required:

a) Calculate the deferred tax expense for DB for the year. (20 marks ) (CLO2:PLO2:C5)

b) Prepare the extract of Statement of Financial Position for the year ended ( 31 December 2021. )(5 marks) (CLO2:PLO2:C5)