How the deferred tax should be included in income statement

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Entity E is a newly set up company. It purchased an equipment on 1 April 2019 for £100,000. This equipment is subject to a straight-line depreciation of 25% per year. The tax allowance is given at 40% on the reducing balance for the first three years. In the final year, any remaining unreleased balance will be given as the allowance. The tax rate is 30% per year.

Question 1: Show how the deferred tax should be included in the income statement and the statement of financial position for the year ended 2020, 2021, 2022 and 2023.

Reference no: EM132569797

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