Isaac & Joseph Co purchased new machinery on 1 January 20X5 for $1,000,000. It has a residual value of $200,000, with the useful life deemed to be 8 years. The plant is depreciated on a straight-line basis.

Tax allowances of 50% of the cost of the asset can be claimed in the year of purchase, as depreciation is not allowed for tax purposes. The rate of income tax is 30%

Identify whether a deferred tax asset or liability should be recognised at 31 December 20X5 and at what amount?

The following information relates to an entity:

1. At 1 January 20X8 the carrying amount of non-current assets exceeded their tax written down value by $850,000.
2. 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 statements.
3. During the year ended 31 December 20X8 the entity revalued a property. The revaluation surplus was $250,000. There are no current plans to sell the property.
4. The tax rate was 30% throughout the year.

What is the provision for deferred tax required by IAS 12 Income Taxes at 31 December 20X8?

The statements of financial position of Nedburg Co include the following extracts:

Statements of financial position as at 30 September

The tax charge in the statement of profit or loss for the year ended 30 September 20X2 is $270 million.

What amount of tax was paid during the year to 30 September 20X2?

The trial balance of Highwood Co at 31 March 20X6 showed credit balances of $800,000 on current tax and $2.6 million on deferred tax. A property was revalued during the year giving rise to deferred tax of $3.75 million. This has been included in the deferred tax provision of $6.75 million at 31 March 20X6.

The income tax liability for the year ended 31 March 20X6 is estimated at $19.4 million.

What will be shown as the income tax charge in the statement of profit or loss of Highwood at 31 March 20X6?

Astral Co purchased an item of plant for $40,000 on 1 September 20X1. The plant has an 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 a 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 balance basis in the 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?

Jasper Orange Co's trial balance at 31 December 20X3 shows a debit balance of $700,000 on current tax and a credit balance of $8,400,000 on deferred tax. The directors have estimated the provision for income tax for the year at $4.5 million and the required deferred tax provision is $5.6 million, $1.2 million of which relates to a property revaluation.

What is the tax liability recognised in Jasper Orange Co's statement of financial position for the year ended 31 December 20X3?

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 million on deferred tax. The tax charge for the current year is estimated at $16.2 million and the carrying amounts of net assets are $13 million in excess of their tax base. The income tax rate is 30%

What amount will be shown as income tax in the statement of profit or loss of Ullington Co for the year?