Ray Berhad is a Malaysian listed company. The company manufactures medical supplies. The financial year end is
Question:
Ray Berhad is a Malaysian listed company. The company manufactures medical supplies.
The financial year end is 31 December annually. The following financial information is furnished by the management:
1. On 1 January 2021, the brought forward deferred tax assets was RM10,000. It was calculated using tax rate of 20%.
2. Ray Berhad has a land costing RM900,000 and treats land as a non-depreciable asset. However, the land does not enjoy capital allowance.
3. On 1 January 2020, Ray Berhad purchased motor vehicles costing RM280,000. The useful life is 5 years. The total capital allowance claimed as at 31 December 2021 is RM56,000.
4. The balance of trade receivables at cost as at 31 December 2021 is RM50,000. As at 31 December 2021, the provision for doubtful debts is RM20,000. The tax rule allows specific bad debts only.
5. Ray Berhad has an investment that was measured at fair value through profit or loss with the cost of RM300,000. As at 31 December, the fair value was RM250,000. The fair value change was correctly recorded.
6. As at 31 December 2021, the penalty payable was RM10,000.
7. The tax rate for year 2021 is 25%.
Required:
In compliance with MFRS 112: Income Taxes:
a) I need a table showing the carrying amounts, tax base and temporary differences for each of the items above as at 31 December 2021?
b) Calculate the amount of deferred tax charged in the tax expense account for year 2021?
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill