The accounting profit before tax of Robinhood Ltd for the year ended 31 December 2012 amounted to $15,000 after including the following information. The financial year of the company was from 1 January 2012 to 31 December 2012.

Plant: Opening balance based on accounting as at 1 January 2012 was $100,000. Ending balance as at 31 December 2012 was $100,000.

Goodwill: Opening balance based on accounting as at 1 January 2012 was $50,000. The recoverable amount at 1 January 2012 was $3,000. The cumulative taxable temporary difference in relation to plant as at 31 December 2011 and 2012 was $10,000 and $20,000 respectively.

Deferred tax liability in relation to plant as at 1 January 2012 was $3,000. The cumulative taxable temporary difference in relation to plant as at 31 December 2011 and 212 was $10,000 and $20,000 respectively.

Depreciation expense of plant: Depreciation expense based on accounting for the financial year was $20,000. Accumulated depreciation of plant: opening balance based on accounting as at 1 January 2012 was $20,000.

There is no other difference between accounting profit and taxable income except above information. Other tax information income tax rate was 30 per cent.

Required: 

i) Complete the tax worksheet to determine the balances of deferred tax asset (DTA) or deferred tax lability (DTL) as at 31 December 2011.

ii) Determine taxable income and current tax liability for the financial year ended 31 December 2012. Prepare the journal entry to record the current tax liability.

Answer rating: 100% (QA)

i Tax worksheet Assets Plant Opening balance 100000 Cumulative taxable ... View the full answer