In Class Exercise - Chapter 5 Deferred Tax

QUESTION 1

Item Carrying Value Tax Base

Plant RM6,100,000 RM3,680,000
R&D RM6,800,000 nil
Provision for Warranty RM3,300,000 nil
Accrued Interest Expenses RM900,000 RM800,000
Donation RM500,000 nil

Total Taxable Temporary Difference

Deductible Temporary Difference
r 5 Deferred Tax

Temporary Difference TTD/DTD

RM2,420,000 TTD
RM6,800,000 TTD
RM3,300,000 DTD
RM100,000 DTD
RM500,000 TTD

RM9,720,000
RM3,400,000
Item RM
Taxable Temporary Differences RM9,720,000
Deductible Temporary Differences -RM3,400,000
Net Taxable Temporary Differences RM6,320,000
Tax Rate 24%
Ending balance DTL RM1,516,800
(-) Beginning balance DTL -RM790,000
Deferred Tax Expense RM726,800

Tax Payable RM2,430,000 × 24% 583200

Tax Expense 726,800

Journal Entry

Item Dr Cr
Tax Expense RM726,800
Tax Payable RM583,200
Deferred Tax Liability RM143,600
 Sepakat Berhad (Sepakat)
Statement of Financial Position as at 31 December 2018

RM
Non-current Liability
Deferred Tax Liability 143,600

Current Liability
Tax Payable 583,200
Under Liability Method, how to calculate deferred tax by applying MFRS 112 Income Taxes is firstly we have to calc
on accounting rules then compute carrying amount of assets or liability based on tax rules. From this two answer fin
differences determined either it is Taxable Temporary Differences (TTD) or Deductible Temporary Differences (DTD
Taxes is firstly we have to calculate carrying amount of assets or liablity based
rules. From this two answer find the temporary difference. From amount of temporary
e Temporary Differences (DTD).