Ias 12 Income Taxes-2020

cuarrers 14S 12: INCOME TAXES CHAPTER 12: INCOME TAXES 1AS 12: INCOME TAXES a ICAP PAST PAPER QUESTIONS ty & ing te yea, TL realised capital un of Rs? ilo on sl of shares fisted compa, Tis iaconeis tempt font “opens. Tas 4 Kis expected that atin auboits would a bac expenses amounting oR&0.9 mili of which Rs 03 lon would be allowed in 2015 + Daring ths ya, expenses amounting to Rs 3 milion eine to year nde 31 Deeabe 2011 wer dalled. IT bad inially expected that the ete caense would Be alloucd bar as bag Joss forthe year ended 3, The statements of Financial postion of Nitrogen Lins! he following ext ‘Statements of fnancll poston 212 201 (5 30 Sepuember Rom Ram [Non-curreatKabiltes Defered tax 310 140 (Current abilities - ‘Taxation Bo 160 ‘The tax charge in the statement of profit or loss for the year ended 30 September 2012is RS. 270 ‘at mous oft was pid rng the year to 30 September 20127 ‘Theil bale of al Limi earn ie 31 Mach 216 she cals of, 0 Ls growths 3 nr tise at wry gee iscsi tt wary gee we snl sls. Atl paymens rag the yu eed oman ee SE ‘these, Rs 38 milion erin o goods so daring the previous year Opeang Wee =Guaprer¢ 0 tas rz: INCOME TAXES. a. a, . provision for waranty was Rs 49 million, Sale forthe year ended 30 June 2018 was Rs, 1,750 million. Under the wx laws, these expenses are allowed on payment basis. Applicable tax rte i 30%. ‘What isthe amount of defered tax expense o income in respect of shove forthe year ended 30 Jane 20187 Re : ‘Orage Limited (OL) is in the process of finalizing its financial statements forthe year ended 30 June 2018, Profit before tax for the year ended 30 June 2018 was Rs. $08 million (OL sells goods with 1-year warranty andi is estimued that warranty expenses are 2% of annual sales. Actual payments during the year related wo warranty claims Were Rs. $4 million, Of these, RS 38 milion pertain to goods sold during the previous year. Opening balance of provision fr waranty was Rs, 49 million, Sls forthe year ended 30 June 2018 was Rs. 1,750 milion. Under the tx laws, these expenses are allowed on payment basis. Applicable tx rate is 37%. ‘Whats the amount of curent tax after considering above information forthe year ended 30 Jone 2018? Be. Wash te flowing oe NOT giv dete? (0) Diaecs between secon ders sd x dren (©) Sxpemencge ns bat abl i (© Revahatn anon rhein © Une i ee Woh TWO of be fallowing ae exp, where cayinganounisava ea ey (©) Accrued expenses tt hve aed ten deduced in daunting he een = (©) Allowance for bad debis where tax relies granted wien the deb is written-off (©) Accrued income that will never be taxable (© Capitalized development costs which ae allowable in ax upon payment ‘The following information relates toa building of Jet Limited (JL). (Accum 2018.04) an sc en eee Se en arcmuronecane ieee etic ta {De deferred tx Libility as at 31 December 2018 in respect of building is (ke 384000 ©) Rs. 432,000 © Rs s0¢000 (2) Rs $52,000 (Actuma 201994) VeJAS 12: INCOM, CAPER ‘SOLUTIONS | amount _base _ | Machine a ae TD | (500-100;(500-220 [fay @ [1 Tanation . | Ree Tax bes Curent tx | Det ow Le aeeeetes a Bi owe, _ Defer 9 iby @ hd eter tx expense bak) us et wa) Pichla sal ida tax record bo 1 won | Particulars ee ‘Caren tx payable C4 “Curent tx expense 4s WS] (©) | irsawal say able yo ps oon cbaiye la 5000s x 2021 ain py Bo 1-Tazation amt Tax Curate i) Deferred tx | caret 3 fax prior period* _# '*2020 main andaza lagaaye tha k 75 pay Karen gay lekin 2021 main is ki bajaye 80 6) ya tou 2020 man nde provision Kh 4.) © | L- Taxation oe Te Current tax: (15,000) | Deferred tax wa) 300) Toa (Current Tax prior period saefe) @ i= Taation HED Calculation of deferred tax | Cevog Tx iteece mo ee ST TTD “way Dr. Defered as aby ne | byetacerety | Rain 000" | tox | (Curent ax Deferred tax way (Creat Tax prior period (W-1) Calculation of revaluation surplus and dsnesaton on Plant | | Plant Oc Taxeo Net Surpin PVE) 8 ate ion plus Surplus | ‘WoV “Asset (W-I) 3.000 oa 25,000| Defend expense (al) _4000_| i] -3) | | [Particulars Dr. Gr) Rat i000 | 1 | pr sa | L Revalution spl | 7.000 a) |e expense wali side pe hai 1 j [Paniedaey ee ce ? | 4 \|cte 3 Ll Le ca xAS 12: INCOME Tay a, © ‘1-Taxation | Tue Curent Detred way Coaen Tax pir period (0-1) Caleuaton of deferred tax ts a a snomt bse — a . 11D (wd) Ge ‘Deferred tax expense (bal.). cacy : : ) © | L Teton te — Derede own ret ax rior erod Jovy |e Deter tay c. oN 108 Deferedtcexgese (al) 40| Ret 10 ea Son oe PPE [Accomting FS = 3) | wa Gomes PPE econ Renhaton 250 | Deecion Expense 1s o/d (Bal) 3,650 De PE (rete ce. ‘Wa (sumed) 3100 | Deon Ege $5 500Est scone taxes mA a |e @ >is ary | ta o: Bip ieee Woman tod Fa oa — (3) tn ica se esa Pt | SE xe bee tacgn Sain we i ay A za ate eS “sya ro eee paer pi 3 seein a Ta be i =| Ren Sep P* Tae |i __ on a 79 ii Seer aR HO ejects ap ee ssa 1S) (@) | QW Deferved as Tb as on | o irae nite feu’ me | now v2) ap | tay yoo on (et cet Pear ke cin ween Less: Rentals paid j | ait — be Dad ‘Deferred tax expense (Bal) eld (0V-2) Calculation of deferred ta Carving = Tax_—_—iflerence mount _bwe a WOTTD Tx@2s%eIAS 12: INCOME Taxps CHAPTER4 2 Pron = Deferred tax ability cy, Paid bd Mt w2) Deferred tax expense (Bal.) ” eid 310 — wy Dr. Current Tax Payable Ge. bid 160 Cash (bal) 130 | CTE 100 old 130 ww) | ‘Taxation Rs. in milion Tax (Current tax (100) Deferred tax (170) ci 18.| -Rs.19 | (W-1) Million | _Dr. Deferred tax liability cr Expenses ‘bid 26 ‘Asset 35 old 6.75 | Deferred tax expense (Bal.) 4 | 7 1-Taxation ] 2016 Tax Current tax (4) Deferred tax ow) (4 (98) ‘Current Tax prior period —ja ——— Cash 54) Expense (1,80. 2% 11) 2 9 Dr. DTLIDTA cr. | ba 87 | Deferred tax expense (Bal) 9 eld 31 Canying «= Tax——iifference-—Taxd30% Provision a> 0 ~#DTD DTA (4 Deferred tax as 0030.06.18 | Carving = Tax_—_—ifference Provision DTD Same data asin Q-19 excepiaaew fo 87 For working refer Answer 19 abo ‘Calculation of enrren Profit before tax ‘Add: Warranty Expense Less: Warranties paid ‘Taxable profit for curren year Curent tax @ 359% ‘cin his Q. Because (b) is ¢ permaneat difference. ERE] iB Dr. ____ PPE (Accounting rues) cc Revaluation 375 | Depreciation Expense ons old @al) 1978 Dr. PPE (Tax rules) ‘yd (Assumed)core es neo rns INTERNATIONAL Aci coun INCOME Taxes ANPARD. ACK BE, E STAND; Boe siete the epplesion of We sara, serie hid hin tna which gas 12 loom Tax a ct ger eu Cees sis of which taxation authorities demand taxon tenable "Pros and tax ashore eae pts may fer os ott reconcile the difference Perspective of feth tax nw and IFRS. there has been ‘muted an LAS-12, 186.2 ges ws guidance that thes ponents of come Tax Expense i () Care wx and (i Defeat Curent tae is esc Me profit by considering ony the tx lw, And i ‘nthe caren ix which is paid mens Deferte axis elelted by coriering the iems athe suhories Rave nt consis clenation oft ve crrnt ax par FBS) bene ch ‘shuld have ben treated a per a son cash basso ay ote enon, : I eaapeae a Sian pete ediacaeal neem aoe meee ‘he taxation authorities. We apply the rate on taxable profits to arrive at amount of tax payable to Der amon of ne sya ne pe i ep of * Need aS ns ne een ie cn i enpaayderenes era ‘tpray alerencer are erences eween be aig anon of ” nancial positon andi ax base t pt The ax Base ofan aset or Libis the amou 1 Bones ot atibted o tat asst ibility fr tx m taxable profit and acovaing pot fo a ei irene: These ace he erences betes tae prof ” reverse in subsequent periods, (fo example, te 1 al never "emp inate in the curent prio an "W ocome or expenses dialed) Se03: CALCULATION OF CURRENT TAX Profit before tx ‘Add: Accounting depreciation’ amortization ‘Accounting loss on disposal ‘Tax gain on disposal Bad debt expense for the year (Provision for the year) Gratuity expense for the year / warranty expense ‘Accounting depreciation on leased asset Finance charges on leased asset Deductions not allowed by tax authorities (Fine, penalty ete) Expenses payable (where tax authorities allow expense on payment base) ‘Uneamed lncome (where tax atboties record income on receipt base) Less: Tax depreciation amortization “Tay loss on disposal ‘Accounting gain on disposal Bad debs written off Gratuity paid/ Warranty cost paid Lease rentals paid Borrowing costs capitalised by us, allowed as deduction b oriies Incomes exempt from tax Prepaid expense (where tax authorities allow expense op Ihnome reevivable (where tax authorities record income “Taxable profit for curent year Current tax (Taxable profit x Tex rate) “ i Gi) Gy) o wi) Current Tax Working Explanation: While arriving at accounting profit, we have deducted (Accounting & Tax Depreciation: deprecation as per accounting rules whereas tax aut their own rules. Therefore we will add accounting deprei thorities allow depreciation allowance a5 Pt ation back into the accounting Prof «iy Gin co) o nd surat tax depreciation fo asve at taxable profi a easaniiag & Ta loss on disposal. While arriving at accounting profit, we have deed ecg les (on disposal of Tined asset) calculated using accounting rues wheres 2 aethonteg allow deduction as per their own rules. Therefore we will ad accounting 15 BSS J the necounting profit and subtract the tx loss oarive a taxable profit restating & Tat Galn on disposal: While arriving at accouting profi, we have 245° ‘counting gain (on disposal of fixed asset) calculated using accounting rues where Suthories tax gain as per ther own rules. Therefore we will subtract accounting Scvounting profit (as already added) and add tex gin to ative at taxable profit pe Bad Debts Provision/writen ff; While ariving a accounting prof, we have dedoes Debt expense (means provision which isan eaimate) for the year whereas tax autores Allow actual bad deb expense as deduction. Therefore we will ad back into the accountng profit and subtract the bad debts writen o profit Gratuity Expense/ Gratulty Pald: While arriving at accounting profit, we a provision for gratuity expense (which isan estimate) for the year whereas tax ath Thiow gratuity Paid as deduction. Therefore we will add the whole gratuity expense b*™ rauity pad taxable profit ve et was intourtse AS 12: INCOME TAXES seetment of Lens: As per accountng rules, depreciation on leased ase & aaee chars om wi) Pine are dedusted as expense to reach secoutng profs wheres tak thon oy ‘Se tse rel pa as deduction Therefore we wil 8 bck. the eprecsan a nanee Zhpes om lesed Sac io ecouning pot and utc he leas rea to enh Werle pros {ULATION OF DEFERRED TAX aA pn of ar es mor tan Tax ares in Deferred Tax Lit 1 Ifewing amount of an aset is less than Tax base i cesuls into Deferree Tax Asst. Ifening amount of a liability is more than Tax base it results into Deferred Tax Aseel tfeanying amount of lability is less than Tax base it results into Deferred Tax Llabily rolton of deferred tox - format Canrying __amount__Tax Base _iflerence_ Facdasets- owned x = Povo for doubful debt 5 © (1800) ra Poviin for gratuity! warranty costs 20 © @000) TA Freda leased 100 0 109.00 DTL Lene obligation 80 © (80.00) TA Inet payable o lease (inca 5 o (500) DTA bance) Pepa expense (where ae aut 0 ° 1000 ot slim expense on payment as lng receivable (where a B ° 000 TL ‘rican on receipt basis) gesspyable (where tax ator a © 1300) DTA Allow expense on payment bass) Ureamed Income (where tax authorities 6 0 (4600) TA "er income on recip base) ate * Deductible temp difference ereate deferred tx aset * Tauble temp difference create deferced ta liability ine . * Tax base of deduction not allowed which is yet payable (fr example fine payable) will be considered 4, alto carving amount Tov base of exempt income which is yet receivable will be considered as equ to carying amount En148 12: INCOME Taxes fe re peter arroeh® CC oe v tncome statement approach Balance sheet approach ‘We compare adjusted accounting We compare caring amount protic mth able prof to beprtrericreee culate deferred 3x expense cof DTA or DT account adsed accounting profit > waable profi wil result deferred ax Eipense and ice vers Format for insome statement approach Accounting profit a Jad Deda not allowed 3a tess: Exempt nome jo Adjusted seo ig pORL(AD ax Taxable post ~ Diflerense of A vd B ~ Taxre % Defered tax expense » (Difference x rate) Income statement approach is wedi pe f ayn amount ard ax a faa isnot given in question <=.yarn LAs: ncoe Tans 10 THE FINANCIAL staTEMers sate ended SL December Sep 2 Letasiee 20 Curette ox Defoe tx = opi tax x -Reconlation between accounting Prof before tox witha expense oft before tax ToxRate Tmonabove {Ade Tax effect of inadmssibie expenses (Penalty) tes Tax fet ofenempt income {avefect of Rate change 2010 ©) we Noe reoelition prepared in percentage aswel as scused in Orange Limited question of past, saps If question is silent than reno» rcancltion in rupens, 06: ITEMS RECOGNISED 01/7); eROFTT OR Loss When & non-curent ast is res) ot value within the nancial statements, the revaluation spi recorded in equity (in ‘on surplus ale) and reported a8 other comprehensive income (OCD. While the eareying valu « Yas increased, the tay base of the asset remains the sae and 19 enpocry diference arises, sei become payable on the surplus hn the asset is sold and so the temporary ference i tenable ae rluton sup has ben recognised within equity, comply Wid matching the eee the sus i also charged to OCI Rete Practice Q. 74.76] 7: CARRY FORWARD OF UN-US LOSSES AND TAX CRED} i 0 evidence that foture taxable profit may not be available. Hence, tn that fi ble profit may “sr stdens: IF question is silent assume that ture profits wl be avilable in future sl Pratce Q. 77.78} Pree eset shall be recorded fr the cay forward of nse ox user ed unasedtx ces eng coer tha fre taxable profits wil be availabe. However, the existence of umused i see, should recognise deferred tan ‘onthess items, only wien there is evidence tat sufficient taxable profit willbe avellase ce eHas 12 CHAPTER-4 INCOME TAxe, LO 8: REASSESSMENT OF UN. JISED DEFERRED TAX ASE ‘At the end of each reporting period, an entity renssesses unrecognised deferred tax assets Th_ a eet ed ars Soe ceria eee se eel Fa gar gens may mate mse pe a ei) willbe able pote ea oh car ae pe ce imited disclosed in iis nancial statements for the year Jesses of R40 milion, The company loses ae atilabe for only yeas, Te canes SxPEts tha iis unlikely to wie all the losses and, therefore, does 1X recognize & dfered ar et Tax rte i 35% forthe year and will remain sume for future periods. ded December 31,2018, tha ity In 2019, the company restructures its business and expects tht this restructuring will result in fe taxable profits up to Rs.50 million in next 3 years. The company. therefore, shall recognize at Decca 31, 2019 a deferred tax asset forthe availabe tax lostes to the extent future taxable pats sale le Le. RS.17.5 (Rs.50 millon x 35%AS income taxes ‘ UESTIONS "2g aman oan resend Heeery te sepeition "3000 ssn "aso A setipcne (xemp income) 24900 ioe i a a te or es i ee" ene 3% Set intranets forthe ; tein ke S000 HF ended 31" December 2010, "Tiyan! 0100, Aconntn ein seg Veta ‘Required: ~oaculate the eurent tax expense for the year ended 31" December 2010, “Tox dercition rates 70%, Suton ‘he flewing information is clevsnt fr the year ended 31" December 2015, sin ilion ‘coating profit (before tax) 0 ‘zing Dereon 4 Taxéepedtion 1 epuil fi of § million whic» allowed hy tax authors as a expense fata is 3% eae: (le the erent tax expense tr he year ened 31" December 2015, ds ‘We fllwing information is relevant fr the year ended 30 June 2015 Ascourig profit ot aowed by tx autores) ial ein income (income is exempt rom tax) eu ied: ‘Sule unable profit forthe year ended 30 June 2015. ia. Senter ne, aeons dled or ro a aon Tee nam 2m 50 Acontnga, 20000 2000 20.000 eating depreciation "aise iso Sit curet te for year ended December 31,201,201 2072 >JAS 12s AN ‘Come, CHAPTERS Tey i foe yar ended December 31,2010 & 201) 1 F010 is sil payable and itis pai in Jag ae pace as dled acon Po vent Bass expense of 2000 fo the month of Des Pere ange artis alow ren expense” PB esas 010 and 2011 Calle curent ax for oar ended December 3, 2010 and 2011. Gratuity expense of fe fo PES x of Usman Tne is R.100000 fr Pte x of Us on ely ene ore recorded in 2010, However is paid in 201, Tax authorities Taxrates 40%. cuenta for year ended December 31,2010 nd 2011 Question : Fri btee ex fr 2012 & 2013 of Malik Lu. R5.100,000 each. Gratuity expense of R200, ‘eeordedin 2012 and its pid in 2013. Tax authors allow grauily expense on payment basis Tn elo ted: (a cuenta 1,201 a 7013. Sasson ‘Tre floning notion elev fre year ended 31" Dace 20 Pi befretax oy ‘Accounting depen al ‘Tecewetion im Dividend income (exempt income) ie Fino lowed as dedcton per inome x ators) 0 Tarme # ‘Required: Cause the cuentas expense forthe year ended 31* December 201) 0 ‘The flowing information i relevant forthe year ended 31" December 2012, hots aes ‘te Tax depreciation ‘oe ‘Capital Gain (exempt income) ao ‘Bad debt expense an nd debt written off a Required: Calculate the eu * Cs en pa an pay ‘Te following infomation is ee Profit before tax wan Tax depecinion eae Bad det expense |" Peak ethoriten)4 us |AS 12: INCOME TAXES. inn off sie 1s ie ate the cute ao A Teed cae sense forthe year ended 31" December 2011 jap satan information ie elevat or the yearend 31 December 201 pri efor 1 Feemingcepreiation asrsson ein mit peice expense Bin writen off 1 pov fo arty Wr ‘ey aid ! Iwate a Ferd: Calculate the caren ox expense for the yer ended 31" December 2011 Question Pctwin information sees fr he year ended 31” December 2012. sin 09 Cot ser ( Jamar 2010) "00 zoning depreciation ate 10% “eee rate (ons) as seven January 2012 ° Negus (Chait a and accounting «yea ended3 1 Desemer2012 Sustonls Top Att Lid hs provide he losing prof and os tert fr the ear ended December 31, 2015: Sis 0,000 Les Cos otsles 100000 Goss rot 0,000 tas: “Ain expense ss Salaries ve “50,000 Depreciation 10,000 Fine paid to government 5000 tage | 4,000 Provision for gratuity/warranty | 2.500 Provision for bad debt (Bad Debt expense) _ ‘Loss on sale of fixed asset se T7850) ‘Othe income Dividend income 3008 Interest income 8.000 11,00 Potter tx Be i 1, depreciation is R520. 5, Nény cow pai daring te year was Rs: 1800-7380 Act bad debts writen off Re 200. 5] suthortes allow warranty cost when pid,S12: INCOME Taxes CHAPTER 4,00. woceeds are RSA. 4. Tax WDV ofasse sold is 3,000 ands se on eeip basis 5. Dividend is exempt from ta. “wx aushorities a es Wal oftheir nce is eceable TH Rate oft is30% Regrets jy" Decne 205. aft cue tx expense forte yearended 1" Deseo =e ember 2010. ‘The following information eleva forthe yearend 315 DS 175,000 ‘+ Profi before txation 1.300 Depreciation charged 24700 + Taxallowabl depreciation expenditure of RS 17,800 in accordance wih 1) During 2010 Company hos capitalised develope {he provisions of Jas 18 Asse that x eh on tis expen In which iis incurs, 2) During the year Company had paid out Rs. $00 jn warranty claims and provided for fanber nue i allowed in ull in the perig 5 2.000 5 "Conan ud forage oe pry dng 20101 celebrate success ist two yeas oie iene Ts ot Ro 3,00. tht i expentiie sot eace 4) Taxis chargeable at arate of 30% Required CCalelate the cure tn expense forthe ear ended 3st Desember, 2010, Questions ‘Wager Limited has provided you the following infomation for determining is expense forthe yea 201s: 8) During the year ended December 31, 2015, the company's accounting pit before tx amounted 0 Rs, 40 milion. The profit ineides capita gains amounting to Rs. 10 milion which are exempt om ') The accounting depreciation is 30 milion and tx allowance is 17 million ©) The tax tate for 2018 i 0% Required (Calculate the current ox expense forthe year ended 31 December, 2018 Queston.12 ‘The followin information relates Apri Limited (AL), alistedcomy 31 December 2018: (AL) alisted company, for the financial yearend 2) The poi before for he yur anced Rs. 0 lon O16: R48 mon) 'b) Accounting depreciation forthe years Rs. 10 million forthe year i Rs. 8 milion (2014 Rs. millon). 0" RS 9 milion) whereas tax depeiaion ©), During the year, AL sold machine fr Rs 3 milion and reco 042013 4) ALesed capil pimofRs. lion Galen » exer fom ons of he of Bade expen ened og heya va 5 ition 2 aban wren ite yeas GPE 7 min, ) Appeabe tte ‘lion = listed company. Tis ineo®oe 2 JAS 2S INCOME TAXES, ire ent tax expenise for the y Bete een EXPER or the year ended 31 Decembe, 20 foal listed con 2 sich a eeiee: stration fo the years ended Deanne POMS c0 Janay 1, 2014, 7 RCo on) and R23 mice ee fH Dene tl itor aa es 315 ume 5 tedabontng inn recone ase aescge 5 ne coating epreiaon mem ee Nedemeciaion Ss Hg 4 watt, hse erin ey bores, However, these expenses ave : riln wich were dated by he ‘expected to be all rym ies lredonihetacormnen'a Bonds. r fmeming Rs Lari eo Toe ann This income is exemps from tay, " 1 eyens 2014 and 2013 respectively iy lepeies an unfunded graity scheme, The wovison duty fan 2014 and ore BLL nilin and R23 mon epee eee aE to arhctmasamu 8 on atu of 1) Trepicable tx rates 38%, stein {ane the cuent ax expense cole Deve 205 ncn compart etin-19 7 etd Ro, 10.000 ees) nome im hance on 31 Deembe 2001 ie set om « ny Sur aecummg pteaon fo eRe SS ie Rs M000 GOT Re S00) Revel Races 200 bth 201 am 2082 Tas ee (BOERS 15000) and tax dep ‘septa. Profit before tak was eet: * Clit the taxable profits and current tx per the ta legislation foe 2001 and 2002 Sueien 20 Peet income is recorded in 2001 of Rs. 15,000 andi is received in 2002. Accounting dpeesation for 1 7isRs. 15,000 (2001:Rs. 20,000) and tax depreciation for 2002 is Rs, 20,00 (2001 Rs 30.000) Ton ‘ie 2% Interest income is taxed on receipt basis, Profit before tx was Re. 100,000 in bth 2001 and eit ‘ae he taxable profits and cutent tx pr the tn leisltion for 2001 and 2002, Abd pee of January’ 2002 in advance. Profit 4 gaa 4 Wet of Rs 12.00 in December 200 for the the month of Jena vance Pa STESEISRS Togo fn 2001 ant Rs 10,00 2002 The thors owe he repre Ze Sein 2001. Accounting depeeition for 2002 Rs 14000 (201s 3,00) and tax / sins Sago 01s 200) Tse itr, sta 2. (/ “Se taxable profits and cunent ax per the te lesion fr 2001 and 2002IAS 12: INCOME Taxes, CHAPTER rales: this rent in January 2002. Prof ESTEE sa ots 108 indenter 20 a re ae ae Re TON in 201 an R00 01 KS. 100) 5rd 8 Set icon am te ay ace 3 ieqate A 2001 and 2002 CCaleulate the taxable profits and current tx ert he tax leisation for ALi te ef rn and Ho. 000 a Calculate the taxable profits and cument ax per the ta legisation fr 201 end 2014 " Cost of vehicle purchased on 1 January, 2007 Depreciation on vehicles to nil vsidal value Wear and tear on vehicle (allowed by the ax authority) Rs, 120,000 » yeatssaighline Soars seaghtline Income ax rate 30% Profit before ta forthe year ended *31 December 2007 Rs. 100,000 +31 December 2008 Rs. 300,000 Rs. 100,000 Accounting deprecation expense same fr tee years Rs. 10,000 and ax jon for 2009 i Rs. 20,000 (2008: Rs. 22,000, 2007 Rs, 20,000) Tere are no permanent differences and no temporary differences other than tose evident fom the information provided Required: CCsteulate the wxable profits and curent normal ax per the ta legislation for 2007, 2008 and 2009, Interest income is recorded in 2001 of Rs. 15,000 and iti received in 2002, Tax rte is 30%. Irs! income is taxed on receipt basis. Profit before tax was Rs. 100,000 in both 2001 and 2002, Oper Dolance of deferred tx liability / asset was nil. Required: repare journal entries for tx fr the year ended 31 December, 2001 and 200: ‘Question=26 Bled received Rs. 20,000 as renal income in advance on 31st December 2001 (the year-end) fom ® tenant forthe month of January 2002. Renal is taxed on recrpt bass: Prot elore og wr es 150.00 ‘oth 2001 and 2002. Tax rae i 30%. Opening balance of dered as lie sacs wes a Required: Prepare journal entries for tax forthe year ended 31 December, 2001 and 200: <= OTty cunt TER 14S 12: INCOME TAXES, a a7 is information relevant for the year ended 31* December Te li Profit for 2002 (2001 = 400,000) oe 600,000 econ, we received advan lascuning po, we received advance rental income fr January 2002. Tax authorities tnx renal in eee 8 fax rate is cece ce fs 1000 30% Fete ro frie er ene Deen 3,20 a 02 a *Smar bas provided you with the following data. Profit before tax for 2011 & 2010 is 100,000, During 5 ned rental income of Rs.10,000 which is received in January 2011. Tax rate is 30%. * be ea easiest income on recep basis mee yer Dei a uations nied has disclosed accounting profit for year ended December 31, 2012 & 2013 at Bete. 000, Rental income of last 2 months of 2012 will be received in 2013 amounting 10 Rs. 60.000 ae atpcties tax rentals on receips sis Tax ate is 30%, Required: Peete current tax expense for the year ended December 31, 2012 and 2013, 2. Prepare journal eres fr tax fo the year ended December 31,2012 and 2013 1S Prepare profit and los extras fc sea ened December 31, 2012 and 2013. ond See ent of Rs 18,000 in Tet 200% for the the month of January 2002 ii advance, Profit cree eee en 300000 in 20 a! s.05,000 in 2002, The tx authorities allowed the prepayment of jie defied in 2001, Tax ric 5c. Opening balance offered tx ibility / att was red: rear journal entries for tax forthe yess ended 31 December 2001 and 2002 uations Mi Antony eared profit before tx of Rs.100,000 for 2014 and 2015 each, He paid electricity bill of ay 208m cee 2014 R200, ox sone alow exes on i i. at fs vended December 31,2014 and 2015, ember 31,2014 and 2015, 2015, culate current tx expense forthe ye Prepare journal eres for tax forthe year ended Det Prepare profit and loss extract forthe year ended December 31,2014 a Decston-32 ‘aimed ret of Rs 1600 in December 200 but nly id hi rent nary 2002, ro before is Re 250000 in 2001 and Rr, 250,000 in 2002 The tx authority alfowed te ent payable f0 be te in 2002, Tax rate is 30%. Opening balance of deferred tx ability Require: "spare journal entries for tax forthe year ended 31 December, 2001 and 2002.TAS 12: INC CHAPTER OME TaXe, ean la Snel eet 9 a 3 bl 31 Dh ng ‘Question. 24 Th January. 2001, Hesha Lud purchased fined asset for Rs. 30,000 Accounting depreciation is Rs. 106% foreach peat ad tox depreciation for 2003 is RS. 4000 (2002: Rs. 12,000, 2001: RS. 1,000) Pa before tx was Rs. 100,000 foreach yea, Tak rate is 30%, Opening belance of deferred wai asset was il. Required: ; 8) Caleulate current tax enpense for 2001, 2002 and 2003, ') Caleulate deferred tax expense for 2001, 2002 and 2008, ©) Prepare Statement of Comprehensive Income Extracts for the year ended 31 December 213 ineluding comparative for 2002 and 2001 Ovestion-3s In Jansary, 2002 Suzuki Lid, purchased machinery for Rs, $50,000. -counting depreciation is 1% ce Straight Tine basis and tx depreciation is 25% on Straight Une os before twas RS. 10050 Rs. 200,000 and Rs. 300,000 in 2002, 2003 and 2008 respectivls. > vale is 30%. Opening bln o deferred tax lability / asset was nl | Required 4) Calelate x expense forthe year ended December 31,2002, 2003 snd 2004 1b) Prepare the curent ax and deferred tax Joural entries fr all ofthe above mentioned yee. In July 2010 ABC Lid purchased» Plant for Rs, 1,150,000 Accounting depreciation is 15,000 fe year and wx depreciation is 25,000, 30,000 and 35,000 for 2013, 2012 and 2011 respectively. rl before tax was Rs. 400,000 inal ofthe above yeas, Tax rte is 35%, Opening balance of defre! ibility asset was i Co Reve, 2) Cie eps yar edd an 30,2011, 2012 nd 20 5 pe comet tan tee oral ete aoe mene ye {enn 007 Shabeen tut in January 2007 Sha purchased Fixed Assets for ad s) eared is Rs. 1,200. provision for doubtful deb is Rs.1200 9. Opening defered ai io Tarte is 30% eure: Catt cuent tax expense and deferred tx expense forthe ea ended Deember3,2012 a Te following intarmaton is relevant forthe year ended 31" December 2014 Accounting pot forthe eat ended December 31-2014 i R 40.00 yearend is 31.12.204 ‘Aecoutng WDV on 1.12014 is Rs 80,000 hovever ax WDV on same yi Rs 45,000 Accounting depreciation e Rs 5,000 for 2018 atx depreciation i Rs 9.00 fer the same yer Dising the yay an aset Having accounting bok value of Rs. 6,00 is sod or Rs. 9,000 ex WDV cate dit of dps was Rs 4.00. ratty expense forthe year is RS.3,200 and gravity Bade enpens for the yea sR 5,00 and bo db writen oT Fenty paid to government is Rs 6.000. Exempt come eamed i Rs. 7,200 Uneared etl income on 31,12 2014 is R&A.200 Rental income taxed on ree ass Following opening tances are appearing. 2) Defered tax hability 13360 Provision for dovbifl debt 1,000 Provision fr gratuity 00 eS cae poids Rs2,500 3,000.

Ias 12 Income Taxes-2020

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