What is the amount of deferred liabiity recognised

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Moffat Co own an asset with an original cost of $600,000 which is revalued to $900,000 at 31 december 20x6 with no equivalent adjustment made for tax purposes. prior to the revaluation the asset had a carrying amount of 450,000. tax allowance given to 31 december 20x6 are 200,000.

  • When an asset is sold at a profut, the country in which moffat operates, does not tax sales proceeds in excess of cost but it includes the cumulative tax allowances in taxable income. the tax rate is 20%

Problem 1: What is the tax base?

Problem 2: What is the amount of deferred liabiity recognised in respect of the asset at 31 december 20x6?

Reference no: EM133001739

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