Calculate the deferred tax provision

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Reference no: EM131340893

The following information relates to Terril Co as at 31 December 2004:

	Carrying Value EUR	Tax Base EUR
Non-current assets
Property, plant and equipment	200,000	175,000
Receivables
Trade receivables(*)	50,000
Interest receivables	1,000
Payables
Fine	10,000
Interest Payable	2,000

(*) The trade receivables balance in the account is made up of the following amounts:

	EUR
Trade receivables	55,000
Doubtful Debt provision	(5,000)
	50,000

Further information:
1. The deferred tax balance as at 1 January 2004 was EUR 1,200.

2. Interest is taxed on a cash basis.

3. Provisions for doubtful debts are not deductible for tax purposes.

4. Fines are not tax deductible. Calculate the deferred tax provision which is required at 31 December 2004 and the charge for income taxes to the income statement for 2004.

Reference no: EM131340893

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