this question comes from Tan, P. H. N., Lim, C. Y. and Kuah, E. W. (2020). Advanced Financial Accounting: An IFRS Standards Approach. 4th Edition. McGraw-Hill.

yes

Company A recorded a profit before tax of $2,500,000 for the year ended 31 December 203. The tax rate for 203 was 24% while that of 202 was 22%. Deferred tax liability as at 31 December 202 was $26,400. (a) On 1 January 20x1, Company A purchased plant and machinery costing $120,000. The useful life of the plant and machinery was five years, but the capital allowances were to be claimed over a three-year period. (b) On 1 July 20x2, Company A purchased specialized equipment costing $150,000. The useful life of the equipment was five years from the date of acquisition. However, for tax purposes, capital allowances were claimed in full during 202. (c) Company A completed the development phase of a new drug on 1 January 20x2, which amounted to $50,000. The expenditures were not deductible for tax purposes but were deemed to have an economic useful life of five years for accounting purposes. (d) The movement in the provision for impairment losses is as follows: Impairment losses were allowable for tax purposes in the period of utilization. (e) Dividends received during 203 amounted to $50,000 while dividend income for 203 was $60,000. Dividends receivable as at 1 January 203 were $20,000. Dividend income was taxed when received. (f) Unearned revenue balance arising from service fees collected in advance as at 31 December 203 was $14,000. Cash received during the year in respect of unearned revenue was $32,000. Earned revenue from service fees for 203 was $30,000. Service fees were taxable during the year when the proceeds were received. (g) Disallowed items are as follows: Required: 1. Prepare the tax computation to determine the tax payable for the year ended 31 December 20x3 based on the above information. 2. Determine the items and amounts of permanent differences for the year ended 31 December 203 based on the above information