Reference no: EM132887310

Consider each of the following assets and liabilities which appear in the statement of financial position of HKIVE Ltd at 30 April 2021:

(a) A motor lorry which cost $100,000 is shown at its written down value of $20,000. For tax purposes, its written down value is $30,000.

(b) A loan payable is shown at $60,000. The repayment of the loan will have no tax consequences.

(c) An amount receivable is shown at $45,000. Of this amount, $25,000 has already been taxed but the remaining $20,000 will be taxed in the accounting period in which it is received. The whole $45,000 has already been included in accounting profit.

(d) An amount payable is shown at $3,000. This relates to an expense which has already been deducted when computing accounting profit but which will not be deducted for tax purposes until it is paid.

Required:

Problem 1: Compute the tax base of each of the above assets and liabilities and identify any deferred tax asset or liability for each item.