Accounting for taxation 134 _Ullington Co's trial balance shows a debit balance of $2.1 million brought forward on current tax and a credit balance of $5.4 milion on deferred tax. The tax charge for the current year is estimated at $16.2 milion and the carrying amounts of net aseets are $12 millon in excess of their tax base. The income tox rate is 20%. What is the amount of income tax recognised in the statement of profit or lors of Ullingten Ce for the year? O $15.6 milion © $12.6 million $16.8 million © $18.3 milion (2 marks) 185 Jasper Orange Co! ‘on current tax andl a credit balance of $8,400,000 on deferred tax. The directors have ‘timated the provision for income tox for the year at $4.5 million and the required deferred tax provision is $8.6 milion, $1.2 milion of which relates to a property revaluation ‘al balance at 21 December 20X3 shows a debit balance of $700,000 What is the amount of income tax amount recognied in Jasper Orange Co's statement of profit or loss for the year ended 31 December 20X3? © Stmilion © $24milion O $12million $3.6 milion (2 marks) 126 The following information relates to an entity Att January 20X8 the carrying amount of non-current assets exceeded their tax written down value by $850,000. (For the year to 31 December 20X8 the entity claimed depreciation for tax purposes of $500,000 and charged depreciation of $450,000 in the financial statement Gi) During the year ended 31 December 20X8 the entity revalued a property. The revaluation surplus was $250,000. There are no current plans to sel the property, (The tax rate was 20% throughout the year. ‘What is the provision for deferred tax required by IAS 12 Income Taxes at 31 December 20X87 © $240,000 © $270,000 © $318,000 © $345,000, (2 marks) on ee187 The statements of financial position of Nedburg Co include the following extracts: Statements of financial position as at 30 September 20x2 —20x1 Sm ‘Sm Non-current liabilities Deferred tax 310 two Current liabilities ‘axetion 130 160 The tax charge in the statement of profit or loss for the year ended 20 September 20%? is $270 milion ‘What amount of tax was paid during the year to 30 September 20X27 8 milion (2 marks) 138 The tial balance of Highwood Co at 31 March 20X6 showed credit balances of $800,000 (on current tax andl $2.6 milion on deferred tax. A property was revolued during the year giving rise to deferred tox of $3.75 millon. This has been included in the deferred tax provision of $6.75 million at 31 March 20X6, ‘The income tox lability for the year ended 31 March 20X6 is estimated ot $19.4 millon. ‘What is the amount of the income tax charge in the statement of profit or loss of Highwood at 31 March 20X6? $ milion (2 marks) 129 Astrol Co purchased an item of plant for $40,000 on 1 September 20X1. The plant has on ‘estimated useful life of five years and an estimated residual value of $5,000. The plant is depreciated on a straight-line basis. Local tax law does not allow depreciation as an ‘expense, but « tax allowance of 60% of the cost of the asset can be claimed in the year of purchase and 20% per annum on a reducing belanee basis inthe following years. The rate of income tax is 30%. What charge or credit for deferred taxation should be recorded in Astral Co's statement of profit or loss for the year to 31 August 20X2? $17,000 charge © $5,100 charge © $8,100 crealt © $17,000 eredit (2 marks) (ACCA, Examiners Report June 2018) BrP 48 Financial Reporting (FR) .140 Isaae & Joseph Co purchased new machinery on 1 January 20X5 for $1,000,000. It has. 4 residual value of $200,000, with the useful life deemed to be years. The plant is depreciated on a straightsline basis. Tax allowances of 50% of the cost oft depreciation is not allowed for asset can be cloimed in the year of purchase, as tax purposes. The rate of income tex is 20%, Identify by selecting the options provided below, whether a deferred tax asset or ability should be recognised at 31 December 20X5 and at what amount? (2 marks) Or Questions 49