Question

D) On 1 January 2018, the deferred tax liability brought forward for RM50,000. The following is the Statement of Financial Position Bhd for the year 2018: hy brought forward for Megaway Bhd was ent of Financial Position (extract) for Mcgaway Megaway Bhd Statements of Financial Position (extract) as at 31 December 2018 RM Non-current assets RM RM Cost Accumulated depreciation NBV Plant Equipment Research and development 2,000,000 1,200,000 450,000 (600,000) (360,000) (200,000) 1,400,000 840,000 250,000 Current liabilities Provision for warranties 66,000 Additional information: i. Plant is not given any tax relief or capital allowances ii. Tax depreciated value of equipment was RM180,000 iii. Tax rule allows full deduction for research and development when incurred iv. Tax rule allow cash spent on actual repairs and refunds on warranties given v. Tax rate is 25% Required: Calculate the amount deferred tax charges in the Statement of Profit or Loss. (CLO1:PLO3:04)(19 marks)

Answer 1

Deferred tax charges will be 161,000 in the statement of Profit and Loss

Particulars	Book Value	Value as per Tax	Difference	Tax Rate	Deferred tax liability / (Asset)
Equipment	840,000.00	180,000.00	660,000.00	25%	165,000.00
Research and Development	250,000.00	-	250,000.00	25%	62,500.00
Provision for Warranties	-	66,000.00	(66,000.00)	25%	(16,500.00)
Total Deferred Tax Liability at year end					211,000.00
Less : Opening Balance of deferred tax liability					50,000.00
Deferred Tax expense during the year					161,000.00