- This topic has 2 replies, 2 voices, and was last updated 6 years ago by
.
- Posts
Hi Mike,
Thanks for the help in the previous question. In Q2, how was the deferred tax on revaluation computed?
Thanks,
Mariam.
Also, how did we compute the value of $11870 for the retained earnings?
Regards,
Mariam.
According to the trial balance as at 1 October, 2012, land had a value at cost of $12 and buildings a value of $48 at cost
In addition, as at 1 October, 2012, there was accumulated depreciation on the buildings of $10 giving a net book value on the buildings of $38
Then comes the revaluation as at 1 October, 2012 and land is revalued to $16 and the buildings to $38.4 giving a revaluation surplus of $4.4
For the purposes of deferred tax, this surplus is multiplied by the current corporate tax rate of 25% giving us a figure of $1,100
OK on that?
“how did we compute the value of $11870 for the retained earnings?”
$11,870 is the figure for profit after tax for the year as shown in the answer to part a)
OK?
- The topic ‘DEC 13 Q2’ is closed to new replies.