2. The accounting profit before tax for the year ended 31 December 2020 for Marmadey Sdn...

 

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2. The accounting profit before tax for the year ended 31 December 2020 for Marmadey Sdn Bhd amounted to RM37,000. The draft statement of financial position at 31 December 2020 contained the following assets and liabilities: a) b) C) 1. Assets Cash Additional information: 11 Accounts receivables Allowance for doubtful debts iii. Rent receivable Motor vehicle Accumulated depreciation-motor vehicle Equipment Accumulated depreciation-equipment Deferred tax asset Liabilities Accounts payable Provision for annual leave Current tax liability Deferred tax liability Required: 2020 (RM) 23.000 24,000 (6,000) 31 March 2020 30 June 2020 30 September 2020 5,600 36,000 (31,500) 200,000 (120,000) 2 31,310 9.000 ? ? RM3,900 RM3,800 RM3,700 2019 (RM) 19,000 28,000 (5,000) 4,800 36,000 (22,500) 260 000 (104,000) 12,900 The balance amount of deductible for tax purposes in the future periods relating to the equipment is RM110,000 and the motor vehicle is RM4,500. 43,000 12,000 The current tax for the financial year ended 31 December 2020 is RM11,115. Quarterly income tax instalments paid during the year were: 15,200 5,490 The tax agency uses cash basis in determining the income and expenses. The company tax rate for 2020 is 30%. Determine the balance of deferred tax assets and/or liabilities for Marmadey Sdn. Bhd. as of 31 December 2020 by individual items and in total amount. (6 marks) Prepare any necessary journal entries and calculate the current tax liability accrued as at 31 December 2020. (4 marks) Temporary differences arise when the carrying value of an asset or liability differs from its tax base. Explain the differences between temporary differences and tax base. (3 marks) (Total: 13 Marks) 2. The accounting profit before tax for the year ended 31 December 2020 for Marmadey Sdn Bhd amounted to RM37,000. The draft statement of financial position at 31 December 2020 contained the following assets and liabilities: a) b) C) 1. Assets Cash Additional information: 11 Accounts receivables Allowance for doubtful debts iii. Rent receivable Motor vehicle Accumulated depreciation-motor vehicle Equipment Accumulated depreciation-equipment Deferred tax asset Liabilities Accounts payable Provision for annual leave Current tax liability Deferred tax liability Required: 2020 (RM) 23.000 24,000 (6,000) 31 March 2020 30 June 2020 30 September 2020 5,600 36,000 (31,500) 200,000 (120,000) 2 31,310 9.000 ? ? RM3,900 RM3,800 RM3,700 2019 (RM) 19,000 28,000 (5,000) 4,800 36,000 (22,500) 260 000 (104,000) 12,900 The balance amount of deductible for tax purposes in the future periods relating to the equipment is RM110,000 and the motor vehicle is RM4,500. 43,000 12,000 The current tax for the financial year ended 31 December 2020 is RM11,115. Quarterly income tax instalments paid during the year were: 15,200 5,490 The tax agency uses cash basis in determining the income and expenses. The company tax rate for 2020 is 30%. Determine the balance of deferred tax assets and/or liabilities for Marmadey Sdn. Bhd. as of 31 December 2020 by individual items and in total amount. (6 marks) Prepare any necessary journal entries and calculate the current tax liability accrued as at 31 December 2020. (4 marks) Temporary differences arise when the carrying value of an asset or liability differs from its tax base. Explain the differences between temporary differences and tax base. (3 marks) (Total: 13 Marks)

Answer rating: 100% (QA)

SOLUTION I Calculation of Deferred Tax AssetsLiabilities To determine the balance of deferred tax assets andor liabilities for Marmadey Sdn Bhd as of 31 December 2020 we need to identify the temporary ... View the full answer