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Calculate the amount of tax expense

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Question - Sally Berries Pte Ltd ("the company") runs a chain of dessert shops in Singapore. The company's estimated tax payable for the prior year (year-ended 31 December 2018), was $35,000, while the actual tax payable for the same period as determined by IRAS was $36,800. Total profit for the year ended 31 December 2019 before tax and depreciation was $422,000, and depreciation expense was $75,000.

Additional information -

(1) The company fixed assets comprised ice cream making equipment and the net book value of the equipment as at 1 January 2019 was $393,000. The tax written down value on the equipment as at 31 December 2019 was $275,000.

(2) The company has a credit balance of $9,000 in its deferred tax account on 1 January 2019.

(3) Assume the company's effective corporate tax rate is 17%.

Required -

(a) Calculate the company's deferred tax balance as at 31 December 2019.

(b) Calculate the amount of tax expense that should be reflected in the company's Statement of Comprehensive Income for the year ended 31 December 2019.

 

Reference no: EM132609779

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